COVID-19 > PPP Loan Program

Paycheck Protection Program (PPP)

Loan Forgiveness

Notice Regarding Forgiveness Applications

Borrowers applying for Forgiveness on a First or Second Draw PPP loan will need to wait a minimum of 8 weeks after the loan disbursement date to begin the application process.

Up to 100% of your First or Second Draw PPP loan is eligible for forgiveness if you use the proceeds for eligible payroll and non-payroll expenses during the covered period. Borrowers select their covered period which is 8-24 weeks from the your First or Second Draw loan funds were disbursed. The covered periods for a First Draw PPP Loan and a Second Draw PPP Loan cannot overlap.  At least 60% of the PPP First or Second Draw loan must be spent on payroll to achieve full forgiveness.

Read about the requirements below and begin the application process.

Applications       Eligible Expenditures       Documentation       General Guidance

Applying For Forgiveness

  • A good place to start is to open the forgiveness applications and instructions. You do not need to fill these out because our portal will be used in place of the application, but reading through the forms and instructions will help. There is information below and on the applications to help you determine which forgiveness application you can use, if your forgiveness will be reduced, and what documentation you should gather. To view the applications, Click Here ›
  • Also – review the document called Tips for Submitting a Successful PPP Forgiveness Package. Having the correct documentation ready will help. Click Here ›
  • Review our video and PDF user guides on using the portal.
  • Be sure you use Google Chrome or Microsoft Edge to access the portal.
  • If you have used our portal to apply for a new PPP loan, you already have access to the Customer Portal. If you are unable to remember your password, you may use the Forgot Password link on the portal login screen, to request a password reset.
    PPP Portal Login
  • If you need access to our Customer Portal or have questions, please email pppquestions@bankwithchoice.com or call us at 763-398-3060. We have a team of people available to assist you. Keep in mind the high call volume and be patient. Most times we will respond within 24-48 hours.

 

PPP Loan Forgiveness Applications

Use the application along with the information on this page to show what information will be required to be retained and/or submitted with your forgiveness application. A separate forgiveness application will need to be completed for each PPP loan. Borrowers must submit its loan forgiveness application for the First Draw PPP loan before or simultaneous to the Second Draw PPP loan.

The Forgiveness Application has borrower’s certifications that must be made. Please review the applications so you can be ready to make the certifications when requested.

Form 3508S

This form may be used if you have a First or Second draw PPP  loan that is $150,000 or less. (If the borrower together with its affiliates received PPP loans totaling $2MM – then this form may not be used.)

  • Borrower with a loan of $50,000 or less are exempt from any reductions in their loan forgiveness amount based on reductions in FTE employees and salary or wages.
  • Borrowers that receive a PPP loan of $50,000-$150,000 are required to consider reductions in full-time equivalent employees, employee salary, and wages. All borrowers using this application form are not required to submit supporting documentation for payroll or non-payroll expenses but are required to maintain this information in their files.

(See application instructions for full eligibility requirements of the 3508S)

3508S Application

Form 3508EZ

The EZ form may be used by borrowers with loans more than $150,000 and at least ONE of the situations below is true:

  1. Borrower did not reduce the salaries or wages of their employees  by more than 25% (Ignoring reductions due to an inability to rehire, hire similarly qualified employees, or employees that refused employment as described on the application form), and did not reduce the number of employees or hours of their employees;
  2. Did not reduce the salaries or wages of their employees by more than 25% and Experienced reductions in business activity as a result of health directives related to COVID-19.

(see application instructions for full eligibility requirements of the 3508EZ)

3508EZ Application

Form 3508

Borrowers unable to use Form 3508S or form 3508EZ, will use form 3508:

3508 Application

Borrower Disclosure Form

Borrowers that received First Draw PPP Loans before December 27, 2020 to disclose whether a Covered Individual directly or indirectly held a Controlling Interest in the Borrower at the time the Borrower’s loan application was submitted to the PPP lender.

3508D Disclosure Form

 


Supplemental Worksheets

Payroll records and invoices must support the amounts used in the forgiveness application. These tools can be useful in summarizing the expenses for the bank to review.

Forgiveness Expenses Summary
Non-Payroll ›

Forgiveness Expenses Summary
Payroll ›

Schedule A Worksheet
Click Here ›

 

 

What Types of Expenditures are Eligible for Forgiveness?

Borrowers are generally eligible for forgiveness for payroll costs and non-payroll costs paid or incurred during the Covered Period. The following are considered eligible expenses under the Paycheck Protection Program:

Payroll Costs

Payroll costs include:

  • Salary, wage, commissions or similar compensations
  • Payment of bonuses and hazard pay
  • Payment of cash tips or equivalent
  • Payment for sick, vacation, parental, family or medical leave
  • Dismissal or separation allowance
  • Payments for group health care benefits, including insurance premiums
  • Payments for retirement benefits
  • Payments of state or local tax on employee compensation, not Federal
  • Annual compensation may not exceed $100,000 for any employee as pro-rated for the Covered Period
    • Example: For borrowers that use an 8-week covered period a maximum of  8/52 of 2019 or 2020* or $15,385 maximum and for a 24-week covered period a maximum of 24/52 of 2019 or 2020* or 46,154 maximum for covered employees (but not owners)
  • Owner-employees and self-employed individuals’ own compensation may not exceed $100,000 on an annualized basis as pro-rated for the Covered Period but with a lower cap than for employees.  Forgiveness is capped at 2.5 months worth compensation up to a maximum of $20,833 per individual in total across all businesses.
    • Examples: For borrowers that use an 8-week covered period a maximum of  8/52 of 2019 or 2020* or $15,385; For borrowers that use a 10-week covered period, the cap is ten weeks’ worth (10/52) of 2019 or 2020 compensation (approximately 19.23 percent) or $19,231 per individual And for a covered period longer than 2.5 months, the amount of forgiveness is capped at 2.5 months’ worth (2.5/12) of 2019 or 2020 compensation (up to $20,833) in total across all businesses
  • Owner employees with less than 5 percent ownership in a C- or S-Corporation are not subject to the owners-employee compensation rule

* For First Draw PPP loans made in 2020, borrowers use 2019. For First Draw PPP loans made in 2021 and Second Draw PPP loans, borrowers use the year (2019 or 2020) that was used to calculate the borrower’s loan amount.

Talk to your CPA about Payroll costs that are qualified wages taken into account in determining the Employer Retention Credit, as those are not eligible for loan forgiveness.

Non-Payroll Costs

An eligible non-payroll cost must be paid during the Covered Period or incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period. All mortgages, lease agreements, and services must have been in place before February 15, 2020.

Eligible non-payroll costs cannot exceed 40% of the total forgiveness amount. Non-payroll costs include:

  • Interest payments, not principal payments on real or business personal property (may not include prepayment of interest)
  • Interest payments on any other obligations
  • Business rent and lease payments on business property
  • Utility payments for services such as electricity, gas, water, transportation, telephone or internet access.Operational expenses including payments for software, cloud computing and other HR and accounting needs
  • Property damage during 2020 due to public disturbances not covered by insurance
  • Supplier costs related to a contract or purchase order in effect prior to loan that are essential to operations
  • Worker protection expenditures for personal protective equipment or adaptive investments to comply with COVID 19

What Documentation Will I Need to Provide to be Approved for Forgiveness?

Similar to the PPP application process, your forgiveness application must be accompanied by supporting documentation for the eligible expenditures on loan amount more than $150,000. The requirements are outlined below and are also found on the instructions for each application.

  • No supporting documentation is required for the simplified forgiveness application
  • Documentation supporting wage information as shown on PPP Forgiveness Application, must be retained for a 4 year period following submissions of the loan forgiveness application
  • Other records supporting borrowers loan forgiveness must be retained for a 3-year period following submissions of the loan forgiveness application
  • Second Draw PPP loan borrowers are required to submit sufficient documentation for the revenue reduction before or at time of submitting forgiveness application

 

Payroll Costs

Payroll Records for the Borrower’s chosen Covered Period – between 8 and 24 weeks, consisting of each of the following:

  • Documentation of cash compensation paid to employees
    • 3rd party payroll reports or
    • Bank account statements
  • Tax Forms (or equivalent 3rd party reports) – for covered period or alternative covered periods that overlap the covered / Alternative covered periods
    • Payroll tax filings (941 or 943) and
    • State wage reporting and unemployment
  • Payment receipts, canceled checks or account statement showing employer contribution to health insurance and retirement plans

 

Payroll Records for the Full-Time Equivalent (FTE) for the reference period you will use (see full instructions on Forgiveness Application) consisting of each of the following:

  • Documentation of cash compensation paid to employees during the Reference Period used on the PPP forgiveness Application
    • 3rd party payroll reports or
    • Bank account statements
  • Tax Forms
    • Payroll tax filings (941 or 943)
    • State wage reporting and unemployment

Non-Payroll Costs

  • Documentation verifying payments on covered mortgage obligations may be one of the following:
    • Copy of lender amortization schedule and receipts
    • Canceled checks verifying eligible interest payments
    • Lender account statement from February 2020 and the months of the covered period through one month after the end of the covered period
  • Documentation verifying payments on covered lease (or rent) obligation may be one of the following:
    • Copy of current lease agreement and receipts or canceled checks verifying eligible payments from the Covered Period;
    • Lessor account statement from February 2020 and from the covered period through one month after the end of the covered period
  • Documentation of Covered Utility, Operations, Worker Protection expenditures, or Property damage not covered by insurance may be one of the following:
    • Copy of invoices from February 2020
    • Copy of invoices paid during the Covered Period
    • Receipts
    • Canceled checks
    • Account statements verifying those eligible payments

NOTE: You only need to provide documentation for what you are requesting forgiveness for. If 100% of your loan was spent on payroll expenses, nothing other than payroll records need to be submitted.

Documentation retention: Documentation supporting wage information as shown on PPP Forgiveness Application

  1. Documentation of FTE Safe Harbor Reduction
  2. Records supporting borrowers certifications for the necessity of the PPP loan request and eligibility for PPP loan

Documents that Each Borrower Must Retain for 6 years after the date the loan is forgiven or repaid in full.

Payroll Costs

Payroll Records for the Borrower’s chosen Covered Period – between 8 and 24 weeks(consisting of each of the following:

  • Documentation of cash compensation paid to employees
    • 2019 IRS Form 1040 Schedule C
    • 2019 IRS Form 1040 Schedule F

Payroll Records for the Full-Time Equivalent (FTE) for the reference period you will use (see full instructions on Forgiveness Application) consisting of each of the following:

  • Documentation of cash compensation paid to employees during the Reference Period used on the PPP forgiveness Application
    • 3rd party payroll reports or
    • Bank account statements
  • Tax Forms
    • Payroll tax filings (941 or 943)
    • State wage reporting and unemployment

Non-Payroll Costs

  • Documentation verifying payments on covered mortgage obligations may be one of the following:
    • Copy of lender amortization schedule and receipts
    • Canceled checks verifying eligible interest payments
    • Lender account statement from February 2020 and the months of the covered period through one month after the end of the covered period
  • Documentation verifying payments on covered lease (or rent) obligation may be one of the following:
    • Copy of current lease agreement and receipts or canceled checks verifying eligible payments from the Covered Period;
    • Lessor account statement from February 2020 and from the covered period through one month after the end of the covered period
  • Documentation of Covered Utility, Operations, Worker Protection expenditures, or Property damage not covered by insurance may be one of the following:
    • Copy of invoices from February 2020
    • Copy of invoices paid during the Covered Period
    • Receipts
    • Canceled checks
    • Account statements verifying those eligible payments

NOTE: You only need to provide documentation for what you are requesting forgiveness for. If 100% of your loan was spent on payroll expenses, nothing other than payroll records need to be submitted.

Documentation retention: Documentation supporting wage information as shown on PPP Forgiveness Application

  1. Documentation of FTE Safe Harbor Reduction
  2. Records supporting borrowers certifications for the necessity of the PPP loan request and eligibility for PPP loan

Documents that Each Borrower Must Retain for 6 years after the date the loan is forgiven or repaid in full.

Payroll Costs

Payroll Records for the Borrower’s chosen Covered Period – between 8 and 24 weeks(consisting of each of the following):

  • Documentation of cash compensation paid to employees
    • 2019 IRS Form 1065 Schedule K-1
    • IRS Form 1040 Schedule SE

Payroll Records for the Full-Time Equivalent (FTE) for the reference period you will use (see full instructions on Forgiveness Application) consisting of each of the following:

  • Documentation of cash compensation paid to employees during the Reference Period used on the PPP forgiveness Application
    • 3rd party payroll reports or
    • Bank account statements
  • Tax Forms
    • Payroll tax filings (941 or 943)
    • State wage reporting and unemployment

Non-Payroll Costs

  • Documentation verifying payments on covered mortgage obligations may be one of the following:
    • Copy of lender amortization schedule and receipts
    • Canceled checks verifying eligible interest payments
    • Lender account statement from February 2020 and the months of the covered period through one month after the end of the covered period
  • Documentation verifying payments on covered lease (or rent) obligation may be one of the following:
    • Copy of current lease agreement and receipts or canceled checks verifying eligible payments from the Covered Period;
    • Lessor account statement from February 2020 and from the covered period through one month after the end of the covered period
  • Documentation of Covered Utility, Operations, Worker Protection expenditures, or Property damage not covered by insurance may be one of the following:
    • Copy of invoices from February 2020
    • Copy of invoices paid during the Covered Period
    • Receipts
    • Canceled checks
    • Account statements verifying those eligible payments

NOTE: You only need to provide documentation for what you are requesting forgiveness for. If 100% of your loan was spent on payroll expenses, nothing other than payroll records need to be submitted.

Documentation retention: Documentation supporting wage information as shown on PPP Forgiveness Application

  1. Documentation of FTE Safe Harbor Reduction
  2. Records supporting borrowers certifications for the necessity of the PPP loan request and eligibility for PPP loan

Documents that Each Borrower Must Retain for 6 years after the date the loan is forgiven or repaid in full.

Payroll Costs

Must follow the instructions based on how their business was organized for tax filing purposes.

Payroll Records for the Full-Time Equivalent (FTE) for the reference period you will use (see full instructions on Forgiveness Application) consisting of each of the following:

  • Documentation of cash compensation paid to employees during the Reference Period used on the PPP forgiveness Application
    • 3rd party payroll reports or
    • Bank account statements
  • Tax Forms
    • Payroll tax filings (941 or 943)
    • State wage reporting and unemployment

Non-Payroll Costs

  • Documentation verifying payments on covered mortgage obligations may be one of the following:
    • Copy of lender amortization schedule and receipts
    • Canceled checks verifying eligible interest payments
    • Lender account statement from February 2020 and the months of the covered period through one month after the end of the covered period
  • Documentation verifying payments on covered lease (or rent) obligation may be one of the following:
    • Copy of current lease agreement and receipts or canceled checks verifying eligible payments from the Covered Period;
    • Lessor account statement from February 2020 and from the covered period through one month after the end of the covered period
  • Documentation of Covered Utility, Operations, Worker Protection expenditures, or Property damage not covered by insurance may be one of the following:
    • Copy of invoices from February 2020
    • Copy of invoices paid during the Covered Period
    • Receipts
    • Canceled checks
    • Account statements verifying those eligible payments

NOTE: You only need to provide documentation for what you are requesting forgiveness for. If 100% of your loan was spent on payroll expenses, nothing other than payroll records need to be submitted.

Documentation retention: Documentation supporting wage information as shown on PPP Forgiveness Application

  1. Documentation of FTE Safe Harbor Reduction
  2. Records supporting borrowers certifications for the necessity of the PPP loan request and eligibility for PPP loan

Documents that Each Borrower Must Retain for 6 years after the date the loan is forgiven or repaid in full.

 

What if my Loan is not Completely Forgiven?

If your loan is not completely forgiven, the remaining balance, including interest will be repaid in monthly installments to your loan maturity. Interest begins accruing from the first date of disbursement but is initially deferred to the date that SBA remits the borrowers loan forgiveness amount to the lender. If the borrower does not apply for loan forgiveness they will begin making payments 10 months after the end of the borrower’s loan forgiveness covered period.

 

Guidance

On 1/19/2021, the SBA issued the Interim Final Rule on Loan Forgiveness. This document combines and amends all previous documents.
View Here

 

Loan Forgiveness Resources

Choice Bank’s Cristen Purdy (Commercial Lender and Golden Valley Location President) and Bridget Hansen (AVP Credit), led an informative webinar about PPP loan forgiveness for Minneapolis Business Mentors. They discussed multiple loan forgiveness topics like what application is best for your business, required supporting documentation, and the approval timeline.

To learn more about how to apply for loan forgiveness, read our latest blog post.

Read Blog Post

 

 

 

When is deadline to apply for PPP Loan Forgiveness?

A borrower may submit the forgiveness application any time on or before the maturity date of the loan if the borrower has used all of the loan proceeds for which they are requesting forgiveness. If the borrower does not apply for loan forgiveness within 10 months after the last day of the maximum 24-week covered period or the SBA determines the loan is not eligible for forgiveness, the PPP loan is no longer deferred and will be required to begin paying principal and interest payments.

If the borrower has a Second Draw PPP loan that is more than $150,000, the borrower must submit the loan forgiveness application for the First Draw PPP loan before or simultaneously with the loan forgiveness application for the Second Draw PPP loan.

 

 

Contact

We are here to help! If you have questions regarding the Paycheck Protection Program or other SBA Programs that might be available to you, contact us at:

Email PPP Team                  Call (763) 398-3060