ppp loan forgiveness

PPP Loan Forgiveness Rules & Guidelines

After getting a Paycheck Protection Program (PPP) loan, you should consider how you will use the money to receive complete PPP loan forgiveness.

The major benefit of a PPP loan is that it can be completely repaid. To put it simply, forgiveness converts debt into a gift.

To qualify for forgiveness, you must spend your PPP loan forgiveness guidance loan money correctly over a certain time period and then ask for forgiveness from your lender. The norms and procedures for requesting forgiveness have evolved throughout time.

There are presently three types of forgiveness:

  1. 3508 Form
  2. 3508EZ Form
  3. 3508S Form

Here’s our step-by-step approach to ensuring you obtain complete forgiveness every step of the way.

Acceptance Time for PPP Loan Forgiveness Applications 

ppp forgiveness rules

Yes! The SBA is now accepting applications, but you must first apply to your lender. For an up-to-date list of PPP rules lenders accepting forgiveness applications, see our overview.

Have a Look at the Guidelines

ppp loan forgiveness guidance

  1. Salary, paycheck, vacation, parental, family, medical or sick leave, and health benefits are all part of the payroll is one of the PPP Loan Forgiveness.
  2. Mortgage interest: As long as the loan is signed before February 15, 2020.
  3. Rent: As long as the lease was signed before February 15, 2020.
  4. Utilities—as long as service started before February 15, 2020.
  5. Operations costs include any software, cloud computing, or other human resources and accounting requirements.
  6. Worker safety expenditures—any personal protection equipment or property upgrades required to be COVID compliant beginning March 1, 2020.

Also ReadLearn How to Calculate Your Paycheck Protection Program Loan Amount

What are the PPP Loan Forgiveness Rules ?

First Draw PPP Forgiveness rules issued to qualifying borrowers to qualify for full debt forgiveness if, within the 8- to 24-week coverage period following loan disbursement:

  • Employees have to maintain pay levels.
  • You can use loan proceeds to cover payroll expenditures. Also, other allowable expenses can be covered with them.
  • At least 60% of the earnings are spent on payroll expenditures.

Steps to Apply for PPP Loan Forgiveness

ppp rules

Communicate with your PPP Lender

The 3508EZ and the 3508S are shortened versions of the application for borrowers who meet specific requirements. Your Lender can provide further guidance on how to submit the application.

Gather Your Documentation

ppp forgiveness requirements

Payroll (record all payroll periods that overlapped with the Covered Period or the Alternative Payroll Covered Period):

  1. Bank account statements or reports from third-party payroll service providers that document the amount of money paid to staff.
  2. Tax forms (or similar third-party payroll service provider reports) for the overlapping periods.
  3. Payroll tax filings filed to the IRS (usually, Form 941); and • State quarterly company and individual employee wage reporting and unemployment insurance tax filings reported to the appropriate state (generally, Form 941).
  4. Payment receipts canceled checks, or account statements demonstrating the amount of any employer payments to employee health insurance and retirement programs included in the forgiveness amount.
  1. Business mortgage interest payments: a copy of the lender’s amortization plan and payment receipts, or lender account statements
  2. Payments for business rent or lease: a copy of the current lease agreement, as well as receipts or canceled checks proving eligible payments
  3. Payments for business utilities: copies of invoices and receipts, canceled checks, or account statements.
  4. Covered operational expenditures: copies of paid invoices, orders, or purchase orders, as well as receipts, canceled checks, or account statements proving eligible payments
  5. Covered supplier costs include a copy of any contracts, orders, or purchase orders in effect prior to the Covered Period (except for perishable goods), as well as a copy of any invoices, orders, or purchase orders paid, and receipts, canceled checks, or account statements verifying eligible payments.

Send the Following Documents and the Forgiveness Form to Your PPP Lender

Complete your debt forgiveness application and submit it to your lender along with the required supporting papers, and then follow up with your lender to submit any extra evidence that may be required. Consult your lender for more information, and produce necessary paperwork as soon as possible.

Throughout the Procedure, Keep in Touch with Your Lender

If the SBA conducts a loan review, your lender will notify you of the review and the SBA loan review decision. You have the opportunity to file an appeal against certain SBA loan review decisions. Your lender is responsible for alerting you of the SBA forgiveness amount and the date your first payment is due, if applicable.

When PPP Loan Forgiveness is Rejected

  • Your lender may enable you to present extra documents in order for them to reconsider your request.
  • Otherwise, your outstanding balance will continue to earn interest at 1% for the next 2 to 5 years.
  • There is no penalty for paying in advance. There are no extra costs if you pay down the outstanding debt at any time.


We hope we were able to provide you with valuable content. Everything regarding PPP forgiveness requirements is covered in this blog post. If you liked our work, don’t forget to comment down below and let us know. Also, check out other posts on our website.

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