How to Get Forgiveness for PPP Loans

by Blake Herzog

As more Pinal County small businesses get ready to submit documentation proving they have met the terms of their Paycheck Protection Program loans, Golden Corridor LIVING is providing information from the U.S. Small Business Administration (SBA) to help them find the proper channels to do so.

The federal Paycheck Protection Program was signed into law in April 2020 to provide forgivable loans to small businesses struggling during the COVID-19 pandemic.


First, second draw PPP loans

Recipients can have the full amount of the loan forgiven if after the eight- to-24 weeks covered by the loan disbursement:

  • Employee and compensation levels are maintained.
  • The loan proceeds are spent on payroll costs and other eligible expenses.
  • At least 60% of the proceeds are spent on payroll costs.

Applying for loan forgiveness

  • Borrowers can apply for forgiveness after all loan proceeds for which the borrower is requesting forgiveness have been used. Borrowers can apply for forgiveness at any time up to the maturity date of the loan.
  • If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.

Loan forgiveness process:

1. Contact your PPP lender and complete the correct form. Your lender can provide you with either the SBA Form 3508, SBA Form 3508EZ, SBA Form 3508S, or a lender equivalent.

2. Compile your documentation. This list of documents required to be submitted is not all-inclusive.

    • Payroll (provide documentation for all payroll periods that overlapped with the covered period or the alternative payroll covered period).
    • Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.
    • Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the covered period or the alternative payroll covered period:
    • Payroll tax filings reported, or that will be reported, to the IRS (typically Form 941).
    • State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.
    • Payment receipts, canceled checks or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans the borrower included in the forgiveness amount.
    • Non-payroll (for expenses incurred or paid during the covered period and showing that obligations or services existed prior to Feb. 15, 2020).
    • Business mortgage interest payments: Copy of lender amortization schedule and receipts verifying payments, or lender account statements.
    • Business rent or lease payments: Copy of current lease agreement and receipts or canceled checks verifying eligible payments.
    • Business utility payments: Copies of invoices and receipts, canceled checks or account statements.

3. Complete your loan forgiveness application and submit it to your lender with the required supporting documents and follow up with your lender to submit additional documentation as requested. Consult your lender for additional guidance and provide requested documentation in a timely manner.

4. Continue to communicate with your lender throughout the process. If SBA undertakes a loan review of your loan, your lender will notify you of the review and decision. You have the right to appeal certain SBA loan review decisions. Your lender is responsible for notifying you of the forgiveness amount paid by SBA and the date on which your first payment will be due, if applicable.

For more information about PPP loans and forgiveness, visit www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program