1.How do you get PPP Loan Forgiveness?
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll).
Loan Forgiveness
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
2. What documents are needed for PPP forgiveness?
- Complete the forgiveness loan application
- The application is available on the SBA.gov
- The application is relatively complicated, however there are very clear instructions on how to complete it
- You can also use outside help to complete the application
- You can use the simplified form if you meet one of 3 condition
- 1. No reduction of salaried employees, and No reduction of the pay
- 2. No reduction of hourly employees, and No reduction of the pay
- 3. Not a crop, and had no employees at the time
3.What happens if you do not use all your PPP loan?
The part that is used according to the guideline will be forgiven. The part that is not will become a loan paid at 1% interest for 2 or 5 years based on loan date on or before June 5, 2020
4. What is the deadline for PPP loan forgiveness?
- Loan payment is deferred for 6 months
- You can submit the app as early as you spend the fund
- It can happen before the end of the spending period of 8-24 months
- No later than 10 months from the covered period is over, otherwise the loan is not forgiven
5. What part of payroll is forgiven in PPP?
100% if you meet the conditions
6. Can I use 100% of my PPP loan for payroll?
Yes, you can
7. What documents do you need to keep
- Payroll tax filings (Form 941)
- Income, payroll, and unemployment insurance filings from your state
- Documents verifying any retirement and health insurance contributions
- Documents verifying that your eligible interest, rent, and utility payments were active in February 2020
- Documents verifying your eligible interest, rent, and utility payments (canceled checks, payment receipts, account statements)
8. How long do I need to keep these documents for
6 years from the end of the coverage period