COVID-19 and payment relief Paycheck Protection Program forgiveness FAQ

Embrace the power of forgiveness.

If receiving your Paycheck Protection Program (PPP) loan was a relief, imagine how you’d feel to find out your loan was forgiven. We want that experience for you—so we’re helping you prepare for your forgiveness application.

Latest updates

The forgiveness process for 2021 PPP loans is happening in waves determined by your funding date.

We'll email you when it's time to apply for forgiveness for your 2021 loan.

Learning about the COVID-19 relief bill

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Unfortunately, you can no longer apply for a PPP loan through Truist as the Small Business Administration (SBA) has stopped accepting new PPP applications.

While we can’t provide you with a PPP loan, we might be able to provide you with payment relief options on your business accounts.

Unfortunately, you can no longer apply for a PPP loan through Truist as the SBA has stopped accepting new PPP applications.

While we can’t provide you with a PPP loan, we might be able to provide you with payment relief options on your business accounts.

Given the new changes to PPP forgiveness provided in the Economic Aid Act of 2020, the revised forms (Form 3508/Form 3508EZ/Form 3508S) are available in the PPP Client Portal.

The new SBA guidance removes the requirement for supporting documentation for loans of $150,000 or less by using a revised Form 3508S. If your PPP loan amount is above $150,000, you can apply with the new revised Form 3508 and revised Form 3508EZ, which includes an expanded set of covered operations expenses including certain property damage costs, supplier costs, and worker protection expenses as eligible for forgiveness

Preparing your forgiveness application

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The Economic Aid Act of 2020 provided an easier path to forgiveness for borrowers with PPP Loans of $150,000 or less and expanded the covered expenses eligible for forgiveness for PPP loans of any amount.

For PPP Loans of $150,000 or less, borrowers are now eligible for forgiveness if they sign and submit a certification to the lender. The SBA’s new certification form only requires borrowers to:

  • Provide a description of the number of employees the eligible recipient was able to retain because of the covered loan; and
  • Provide an estimated amount of the covered loan amount spent on payroll costs

Borrowers with PPP Loans of $150,000 or less won’t be required to submit any application or documentation beyond the certification. However, they will be required to retain employment records related to the certification for 4 years and all other documents related to the certification for 3 years.

The Economic Aid Act also changed the definition of the Covered Period for forgiveness. Under the new definition, borrowers can choose a Covered Period that is any date that occurs during the period:

  • Beginning on the date that is 8 weeks after the date of disbursement; and
  • Ending on the date that is 24 weeks after the date of disbursement

Finally, the Economic Aid Act added new categories of eligible expenses, including certain operations expenditures, property damage costs, supplier costs, and worker protection expenditures.

PPP Loans made on or after June 5, 2020 have a minimum 5-year maturity. The PPP Flexibility Act (effective June 5, 2020) didn’t extend the 2-year maturity date on loans made prior to June 5, 2020, so loans made prior to that date continue to have a 2-year maturity.

You can submit a loan forgiveness application any time on or before the maturity date of your PPP Loan. However, if you don’t apply for forgiveness within 10 months of the last day of the maximum covered period of 24 weeks, you’ll have to begin making payments on covered loans. Borrowers with a PPP Second Draw loan of $150,000 or greater must submit their forgiveness application for their PPP First Draw loan before or simultaneously with the application for their second loan.

On June 16, 2020, the SBA released Form 3508EZ, simplifying the forgiveness application process for certain borrowers.

You can submit Form 3508EZ if you:

  • Didn’t reduce annual salary or hourly wages by more than 25% during the Covered Period, compared to the period between January 1, 2020, and March 31, 2020, not including any employee who received more than $100,000 on an annualized basis during any pay period in 2019, and you didn’t reduce the number of employees or average paid hours of employees between January 1, 2020, and the end of the Covered Period; or
  • Didn’t reduce annual salary or hourly wages by more than 25% during the Covered Period, compared to the period between January 1, 2020, and March 31, 2020, not including any employee who received more than $100,000 on an annualized basis during any pay period in 2019, and you were unable to operate during the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with certain COVID-19 related measures related to social distancing, sanitation, or other worker or customer safety requirements.

You can find more information on the Form 3508EZ at the SBA’s website as well as the CARES Act section of the Treasury’s website.

The minimum payroll cost amount is 60% of the forgivable amount, meaning up to 40% of the forgiven amount can be non-payroll costs like certain rent and utilities. 

You may apply for forgiveness for your 2020 First Draw PPP loan at any time. If you haven’t started a forgiveness application, we’re encouraging you to submit your forgiveness application now as the whole process can take months. 

The forgiveness process for 2021 PPP loans is happening in waves determined by your funding date. We’ll email you when it’s time to apply for forgiveness for your 2021 loan.

No. We’re only accepting applications through the PPP Client Portal. Paper applications won't be accepted.

Make your application process easier by preparing required documentation before you begin.

If your PPP Loan is $150,000 or more, you'll need to submit documentation to show how you spent the proceeds of your PPP Loan, such as:

  • Eligible payroll expense documentation, which may include bank statements, payroll reports or IRS payroll filings
  • Non-payroll expenses, categorized as utilities payments, mortgage interest payments, and/or rent payments, documentation may include invoices, billing statements, bank statements, lease agreements, or mortgage amortization schedules

For second draw forgiveness application, you’ll be required to provide revenue reduction documentation if your loan was $150,000 or less and you didn’t provide such revenue reduction documentation prior to your forgiveness application. Additional documentation requirements may vary based on your application.

Understanding your Covered Period and documentation requirements

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You can choose a Covered Period of any length between 8 weeks and 24 weeks, starting on the date your loan proceeds were disbursed. While you have up to 24 weeks to allocate your funds, you can use them in less time if needed.

In general, you’ll be required to submit payroll, FTE employee headcount, and non-payroll documentation with your application. If your loan amount is $150,000 or less, you won’t be required to submit any documents beyond the required forgiveness certification, though you will have to keep documents supporting your forgiveness certification. Below is a summary of documentation requirements from the SBA, if your loan amount is greater than $150,000.

  • The SBA-issued PPP Loan Forgiveness Calculation Form
  • Payroll documentation verifying the eligible employee cash compensation and non-cash benefit payments consisting of each of the following:
    • Bank account statements or third-party payroll service provider reports
    • Tax forms
    • Payment receipts, cancelled checks, or account statements
  • Non-payroll documentation verifying the existence of obligations before February 15, 2020 and eligible payments from the Covered Period, including:
    • Business mortgage interest payments - Copy of lender amortization schedule and receipts or cancelled checks; or lender account statements verifying interest amounts and eligible payments
    • Business rent or lease payments - Copy of current lease agreement and receipts or cancelled checks; or lessor account statements verifying eligible payments
    • Business utility payments - Copy of invoices and receipts, cancelled checks, or account statements verifying those eligible payments
    • Covered Expenses – Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments for covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures.

For second draw forgiveness application, you’ll be required to provide revenue reduction documentation if your loan was $150,000 or less and you didn’t provide such revenue reduction documentation prior to your forgiveness application. If you don’t provide accurate and complete supporting documentation, the loan won’t be eligible for forgiveness.

You must keep all documentation for 6 years after the date the loan is forgiven or repaid in full, and permit authorized representatives of SBA, including representatives of its Office of Inspector General, to access those files upon request. However, for loans of $150,000 and under, borrowers must maintain employment records for 4 years and other records for 3 years.

You can reference the instructions provided by the SBA in the PPP Loan forgiveness application or consult your advisors (tax preparers, financial advisors, accountants, or attorneys) with questions.

Please consult your tax, legal, or accounting advisors with questions or for professional advice.

Using your loan

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Certain payroll and non-payroll costs are eligible for forgiveness with appropriate documentation. The Act now includes certain covered operations expenditures, covered property damage costs, covered supplier costs, and covered worker protection expenditures as eligible for forgiveness.

At least 60% of your PPP Loan must be used for payroll costs, including salary, wages, commissions, tips, employee benefits, compensation to owners, and state and local taxes on compensation paid or incurred during your Covered Period.

  • Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period are eligible for forgiveness if paid on or before the next regular payroll date.
  • Payroll costs that were both paid and incurred can only be counted once toward the forgiveness amount.
  • For a sole proprietor/independent contractor, payroll costs include wages, commissions, income, or net earnings from self-employment.
  • Owner-employees and self-employed individual payroll compensation is limited per individual in total across all businesses and doesn't include health benefits or retirement plan contributions. The limit for forgiveness of owner-employees and self-employed individuals is dependent on the Covered Period selection. For the minimum 8-week Covered Period, the pay can't exceed the lesser of 8 weeks of the 2019 compensation for any owner-employee or self-employed individual/general partner or $15,385 per individual. For the maximum 24-week Covered Period, the pay can’t exceed the lesser of 2.5 months of the 2019 compensation for any owner-employee or self-employed individual/general partner or $20,833 per individual.

Non-payroll costs paid or incurred during the Covered Period can’t exceed 40% of the loan forgiveness request. Non-payroll costs incurred during the Covered Period must be paid on or before the next regular billing date, even if the billing date is after the Covered Period. The following non-payroll costs are eligible for forgiveness:

  • Interest on business mortgage obligations (not including the pre-payment of interest or any payment of principal) entered into before February 15, 2020
  • Business rent or lease payments, on real or personal property, if the lease was entered into before February 15, 2020
  • Business utility payments like electricity, gas, water, transportation, telephone, or internet if the service began before February 15, 2020
  • Certain operations expenditures, property damage costs, supplier costs, and worker protection expenditures as identified in the Economic Aid Act

Covered Period is defined in the SBA Borrower PPP Loan Forgiveness Application.

According to SBA guidance, if you use PPP funds for unauthorized purposes you’ll have to repay those amounts. If you, one of your shareholders, members, or partners knowingly use PPP funds for unauthorized purposes, the SBA may take recourse, which could include charges for fraud. Please consult tax, legal, or accounting advisors for professional advice.

Yes. This program rewards borrowers that hire back workers who may have been laid off. Loan forgiveness is based in part on your ability to maintain or rehire employees, and to maintain salary levels.

If an employee's total compensation doesn’t exceed $100,000 on an annualized basis, the employee's hazard pay and bonuses are eligible for loan forgiveness because they constitute a supplement to salary or wages, and are compensation. As a reminder for the self-employed and partners, if you choose the 8-week Covered Period, it can’t exceed 8 weeks of the 2019 comparison. If you choose the 24-week Covered Period, it can’t exceed 2.5 months of the 2019 comparison.

8-week Covered Period - The pay can't exceed the lesser of 8 weeks of the 2019 compensation for any owner-employee or self-employed individual/general partner or $15,385 per individual.

24-week Covered Period - The pay can't exceed the lesser of 2.5 months of the 2019 compensation for any owner-employee or self-employed individual/general partner or $20,833 per individual.

No. The only interest payments that can be forgiven are on a business mortgage obligation on real or personal property that was incurred before February 15, 2020. A loan secured by movable personal property is a chattel mortgage, as opposed to a conventional mortgage. Personal property typically includes furniture, fixtures, tools, vehicles, and machinery, and equipment.

No. You can only use the PPP Loans for mortgage or rent payment under the Covered Period.

Payroll costs incurred during the borrower's last pay period of the Covered Period are eligible for forgiveness if paid on or before the next regular payroll date. Otherwise, payroll costs must be paid during the Covered Period to be eligible for forgiveness. Payroll costs are considered paid on the day that paychecks are distributed, or the borrower originates an ACH credit transaction.

Determining your forgiveness amount

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There are several factors that determine your PPP Loan forgiveness amount.

Payroll and eligible non-payroll expenses make up the gross amount of your forgiveness. The number of FTE employees and wage/salary decreases cause reductions to forgiveness given the FTE safe harbor exemption rules.

Your PPP loan may be forgiven if you use the proceeds for payroll costs, mortgage interest, rent, utilities, and other eligible covered expenses during the Covered Period after the loan is funded. To receive a full forgiveness, you must spend at least 60% of loan amount on payroll expenses, with a cap of $100,000 annual equivalent per employee.

If you’re using Form 3508S to apply for forgiveness, you won’t have any reductions in the loan forgiveness amount based on reductions in employees, or employee salary, or wages that would otherwise apply.

If you’re using Form 3508 or Form 3508EZ to apply for forgiveness, a reduction in an employee's salary or wages over 25% will generally result in a reduction in your loan forgiveness amount unless an exception applies. 

No. Your loan forgiveness amount won’t be reduced if you make a good faith, written offer of rehire, and document the employee’s rejection of that offer. If a return to work offer at the same salary/wages/hour was rejected by an employee, you must maintain records documenting the written offer and its rejection, and inform the applicable state unemployment insurance office of the rejected offer of reemployment within 30 days of the rejection. The SBA will be posting state unemployment offices on the SBA website.

Employees and employers should know that employees who reject offers of re-employment may forfeit eligibility for unemployment compensation.

The COVID relief bill has repealed the EIDL advance deduction provision of the CARES Act. 

Repaying your loan and moving on

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No. Under the Flexibility Act, payments are deferred until the SBA has made a final decision on your forgiveness application and sent that amount to Truist.

If you don’t apply for forgiveness within the repayment deferral window that runs for 10 months starting the last day of the maximum covered period of 24 weeks, you’ll have to start making payments on covered loans. And we don’t want you to miss your opportunity to take advantage of the payment deferral period, so if you haven’t started yet, we encourage you to apply for forgiveness now as the whole process can take months.

Outstanding loan amounts bear interest at a fixed rate of 1.00%. For PPP loans made prior to June 5, 2020, the term of the loan is 2 years. For PPP loans made on or after June 5, 2020, the term of the loan is 5 years. However, all payments are deferred for a period until the SBA remits the lenders the applicable forgiveness amount. At the end of the deferral period, any accrued interest that hasn’t been forgiven will be due. Monthly payments of principal plus interest will begin after the deferral period.

If you don't apply for forgiveness within 10 months after the last day of the maximum Covered Period of 24 weeks, the PPP Loan is no longer deferred and you'll have to begin paying principal and interest.

Outstanding loan amounts bear interest at a fixed rate of 1.00%. For PPP Loans made prior to June 5, 2020, the term of the loan is 2 years. For PPP Loans made on or after June 5, 2020, the term of the loan is 5 years. However, all payments are deferred for a period until the SBA remits the lenders the applicable forgiveness amount. At the end of the deferral period, any accrued interest that hasn’t been forgiven will be due. Monthly payments of principal plus interest will begin after the deferral period.

We’re committed to processing your application as quickly as possible.

However, the forgiveness decision takes time. Once your application is submitted, we have 60 days to review and process your application and submit it to the SBA. The SBA then has an additional 90 days to remit the appropriate forgiveness amount to Truist, unless the SBA determines that the forgiveness application needs further review. Notwithstanding the terms of the promissory note you signed, payments will be deferred until either the date the SBA has made a final decision on your forgiveness application and sent that amount to Truist, or the date that is 10 months after the last day of the Covered Period if you don’t apply for forgiveness.