The covered period is the time during which businesses must incur or pay expenses to be considered for forgiveness. Your covered period starts on the date your PPP loan funds are disbursed and ends on any date of your choosing that is between 8 and 24 weeks from the disbursement date.

In summary, your loan funds can be used for the following business-related expenses:

• Payroll, including benefits, to retain employees, excluding amounts above a prorated annual salary of $100,000 for employees who make more than that amount.

• Mortgage interest payments for mortgages originated prior to February 15, 2020.

• Rent payments on leases in force before February 15, 2020.

• Utility payments, as long as the services began before February 15, 2020.

• Refinancing an SBA Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 (First Draw loans only).

• Payments for any business software or cloud computing service that facilitates certain business operations.

• Costs related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that were not covered by insurance or other compensation.

• Payments made to suppliers of goods essential to the operations of the business under contracts in effect before the origination of the loan.

• Expenditures made to facilitate compliance with federal, state or local guidance pertaining to sanitation, social distancing or any other worker or customer safety requirement related to COVID-19 during the period between March 1, 2020, and the end of the national emergency declaration.

To determine whether your loan forgiveness amount is subject to reduction due to a decrease in average weekly FTE during your covered period (only applicable to borrowers applying for forgiveness using Form 3508), you must select a pre-COVID reference period to make the necessary comparison. You can choose any of the following:

• February 15, 2019, to June 30, 2019

• January 1, 2020, to February 29, 2020

• Seasonal employers can also consider: any consecutive 12-week period between February 15, 2019, and February 15, 2020

For each employee, follow the same method that was used to calculate Average FTE on the PPP Schedule A Worksheet.

Average FTE is how many full-time equivalency employees you had during the covered period and your chosen reference period. The SBA has determined that 40 hours per week is considered full time for the PPP.

Only compensation for employees whose principal place of residence is the United States is eligible for forgiveness.

Yes, there are several situations where a reduction in FTE would not be counted against you. These include:

• Any positions for which you made a good-faith, written offer to rehire an individual who was an employee on February 15, 2020, but were unable to hire similarly qualified employees for unfilled positions on or before one of the following:
  • For loans made before December 27, 2020: December 31, 2020.
  • For loans made after December 27, 2020: the last day of the covered period.
• Any positions for which you made a good-faith, written offer to restore any reduction in hours, at the same salary or wages, during the covered period and the employee rejected the offer
• Any employees who during the covered period were:
  • Fired for cause
  • Voluntarily resigned
  • Voluntarily requested and received a reduction of their hours

You should refer to the SBA Form 3508 instructions for details about FTE reduction exceptions.

Yes, you can receive full loan forgiveness if all PPP loan proceeds are used for eligible payroll costs. If so, you do not need to document any non-payroll costs during the covered period.

Payroll costs are considered paid on the day that paychecks are distributed, or you originate an ACH credit transaction. Payroll costs are considered incurred on the day that the employee’s pay is earned. Payroll costs incurred but not paid during the last pay period of your 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.

For each individual employee, the total amount of cash compensation eligible for forgiveness may not exceed a gross annual salary of $100,000, as prorated for the covered period. For an 8-week covered period, that’s a maximum of $15,385 per employee; $46,154 per employee for borrowers using a 24-week covered period. Note: the cap does not include eligible non-cash benefits.

Cash compensation:

• Salary, wages, commissions or similar compensation

• Cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips)

• Payment for vacation, parental, family, medical, or sick leave (not covered by Families First Coronavirus Response Act)

• Allowance for separation or dismissal

• Independent contractor or sole proprietors only: wages, commissions, income or net earnings from self-employment, or similar compensation

Employee benefits, the total amount paid by the borrower for:

• Employer contributions for employee group health, life, disability, vision or dental insurance, including the employer contributions to a self-insured, employer-sponsored group health plan, but excluding any pre-tax or after-tax contributions by employees. Borrowers are not to add contributions for these benefits made on behalf of a self-employed individual, general partners, or owner-employees of an S-corporation, because such payments are already included in their compensation.

• Employer contributions to employee retirement plans, excluding any pre-tax or after-tax contributions by employees. Borrowers are not to add employer retirement contributions made on behalf of self-employed individual or general partners, because such payments are already included in their compensation.

• Employer state and local taxes paid by the borrower and assessed on employee compensation (e.g., state unemployment insurance tax), excluding any taxes withheld from employee earnings.

• Any compensation of an employee whose principal place of residence is outside of the United States

• The compensation of an individual employee in excess of an annual salary of $100,000, prorated as necessary

• Employer’s share of payroll taxes

• Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Pub. L. 116–127)

Up to 40% of the forgiveness amount can come from eligible 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. Amounts due for services or obligations during the covered period must be prorated to align with the covered period window.

Eligible expenses, incurred or paid during the covered period:

• Business mortgage interest payments for mortgage obligations that existed prior to February 15, 2020

• Business rent or lease payments for real or personal property under lease agreement in force before February 15, 2020

• Business utility payments for utilities in service prior to February 15, 2020

• Covered operations expenditures

• Covered property damage costs

• Covered supplier costs

• Covered worker protection expenditures

• Electricity

• Water

• Gas

• Telephone & cell phone

• Internet access

• Transportation

Any rent or lease payments made pursuant to lease agreements for real or personal property that were in force prior to February 15, 2020. This includes equipment leases.

A service for the distribution of transportation refers to transportation utility fees assessed by state and local governments.

Payment for any business software or cloud computing services that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses.

Cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that were not covered by insurance or other compensation.

This includes an expenditure made by an entity to a supplier of goods for goods that are essential to the operations of the entity at the time at which the expenditure is made, and is made pursuant to a contract, order or purchase order that was in effect at any time before the covered period, or, with respect to perishable goods, in effect before or at any time during the covered period.

An operating or capital expenditure to facilitate the adaptation of the business activities of an entity to comply with requirements or guidance issued by HHS, CDC or OSHA, or any equivalent requirements issued by state or local government from March 1, 2020, until the President's declaration of an end to the national emergency for COVID-19. Expenses may include the purchase, maintenance or renovation of assets that create or expand:

• A drive-through window facility

• An indoor, outdoor or combined air or air pressure ventilation or filtration system

• A physical barrier such as a sneeze guard

• Expansion of additional indoor, outdoor or combined business space

• On- or offsite health screening capability

• Other assets relating to the compliance with requirements or guidance from HHS, CDC or OSHA, including personal protective equipment (PPE)

Quarterly “gross receipts” for one calendar quarter in 2020 and the “gross receipts” for the corresponding calendar quarter in 2019. Per the U.S. Treasury borrower guidance for Second Draw loans, the following are the primary sets of documentation that can be provided to substantiate your certification of a 25 percent gross receipts reduction (only one set is required):

• Quarterly financial statements for the entity. If the financial statements are not audited, the Applicant must sign and date the first page of the financial statement and initial all other pages, attesting to their accuracy. If the financial statements do not specifically identify the line item(s) that constitute gross receipts, the Applicant must annotate which line item(s) constitute gross receipts.

• Quarterly or monthly bank statements for the entity showing deposits from the relevant quarters. The Applicant must annotate, if it is not clear, which deposits listed on the bank statement constitute gross receipts (e.g., payments for purchases of goods and services) and which do not (e.g., capital infusions).

• Annual IRS income tax filings of the entity (required if using an annual reference period). If the entity has not yet filed a tax return for 2020, the Applicant must fill out the return forms, compute the relevant gross receipts value (see Question 5 of the U.S. Treasury borrower guidance for Second Draw loans), and sign and date the return, attesting that the values that enter into the gross receipts computation are the same values that will be filed on the entity’s tax return.

SBA defines gross receipts as all revenue in whatever form received or accrued (in accordance with the entity’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees or commissions, reduced by returns or allowances. Generally, receipts are considered “total income” (or in the case of a sole proprietorship, independent contractor, or self-employed individual “gross income”) plus “cost of goods sold,” and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms.

Gross receipts do not include the following: taxes collected for and remitted to a taxing authority if included in gross or total income (such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees); proceeds from transactions between a concern and its domestic or foreign affiliates; and amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker. All other items, such as subcontractor costs, reimbursements for purchases a contractor makes at a customer's request, investment income, and employee-based costs such as payroll taxes, may not be excluded from gross receipts.

You must have reached the end of your covered period before applying for loan forgiveness. Your covered period must be a minimum of 8 weeks long (maximum of 24 weeks).

For application types that require supporting documentation, that documentation is required to be submitted with the forgiveness application. You may need to wait for statements to be issued in order to submit your application.

If you have a Second Draw loan, you must submit your forgiveness application for your First Draw loan either before or simultaneously with your Second Draw loan forgiveness application.

The latest date you can apply for loan forgiveness is the maturity date of the loan. If you have not submitted a complete loan forgiveness application within 10 months after the end of the maximum 24-week covered period, payments will be due.

If you complete your application after you start making payments and receive a forgiveness determination that exceeds your outstanding principal balance, a settlement process will occur for any overpayment.

After submission of a complete and signed application, including required documentation, we will begin our review process. The U.S. Bank review process can take up to 60 days. We will contact you if there are any issues with your application.

Following the completion of our review, we will submit a decision on your loan forgiveness application to the SBA for their final review; we will also notify you of that decision. From our submission date, the SBA has up to 90 days to provide us with the final forgiveness amount. When the SBA renders their final review results, we will let you know. Additionally, if the SBA requests more information one of our verification specialists will be in touch. Please note, in some cases we have not received the SBA’s final payment decision within the 90 days. The SBA has notified us that they are doing everything they can to review loan files in a timely manner. We will notify customers when we receive the SBA’s rendered decision.

In addition to using your loan funds on eligible expenses, follow the guidance below to maximize your potential loan forgiveness:

• Expenses must be either paid or incurred during your chosen covered period. Your covered period starts on the date of loan disbursement and lasts from 8 to 24 weeks.

• At least 60 percent of the PPP loan proceeds should be spent on payroll expenses and no more than 40 percent of the loan forgiveness amount can be attributable to non-payroll expenses (e.g., mortgage interest, rent, utility payments, covered operations expenditures, covered property damage costs, covered supplier costs or covered worker protection expenditures).

• Retain existing full-time equivalent (FTE) employee levels and maintain at least 75 percent of existing employee compensation levels through the covered period.

Yes. The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest. The actual amount of loan forgiveness will depend on whether the qualifying criteria is met. You will be required to repay any portion of your loan that does not qualify for forgiveness.

If your original loan amount is less than or equal to $150,000, you can apply through the SBA forgiveness portal and do not need to fill out the SBA paper application. For loan amounts greater than $150,000, please call us at 877-357-4716 for further instructions.

No, with the extension of the covered period to up to 24 weeks, and additional changes to the forgiveness rules, you do not need to apply within 60 days of funding.

You should consult your attorney to understand the potential ramifications and additional requirements of completing the sale of your business while you have an open PPP loan. If you sell your business before completing the loan forgiveness process, you may jeopardize your forgiveness claim.

You can request to have your planned ownership change approved by U.S. Bank.

No, you can only submit one forgiveness application.

Yes. All borrowers, regardless of PPP loan amount, must submit an application in order to request loan forgiveness.

The SBA issued several different forgiveness application forms. Below summarizes each form, based on the versions published January 19, 2021.

Form 3508S - For borrowers with loans of $150,000 or less. Benefits include a simplified application and no supporting documentation required in most cases.

Form 3508EZ - For businesses who did not reduce employee compensation by greater than 25% during the covered periods compared to the most recent full calendar quarter before their covered period (excluding employees who received, during any single pay period in 2019, annualized compensation of more than $100,000) and also meet one of the following criteria:

• They did not reduce the number of employees or the average hours per employee between January 1, 2020 and the end of the covered period (subject to certain exceptions).

• They were unable to operate during the covered period at the same level of business activity as before February 15, 2020, due to compliance with COVID-19 guidance or requirements issued between March 1, 2020, and December 31, 2020 (or, for a PPP loan made after December 27, 2020, requirements established between March 1, 2020, and the last day of the covered period) by HHS, CDC or OSHA including shutdown orders and requirements to operate at reduced capacity from state and local government.

Benefits include:

• Borrowers do not complete the PPP Schedule A or PPP Schedule A Worksheet or equivalent.

• Borrowers certify that their forgiveness amount is not subject to potential adjustments due to decreases in FTE and certain employee compensation, so information on those topics is excluded from the application.

Form 3508 - For borrowers who do not qualify to use any other forms or would like to claim a Safe Harbor, reduction in FTE or compensation level is available through the full form.

All loans of $150,000 or less will use Form 3508S. If your loan is more than $150,000, please review the instructions on the forms to determine which one is applicable to you.

No. The forgiveness application forms are the same for both First and Second Draw loans.

No. A separate forgiveness application must be submitted for each PPP loan.

The type of documentation required may vary depending on the nature of the expense(s) for which you are seeking forgiveness. Our PPP Forgiveness Documentation reference guides can help in preparation.

• Form 3508 forgiveness documentation reference guide
• Form 3508EZ forgiveness documentation reference guide

All supporting documentation is required to submit the forgiveness application. You may need to wait for statements to be issued in order to submit your application.

If completing a Form 3508S, you may not need to submit any supporting documentation. The following are situations where additional documentation or disclosures are required.

• If you have a First Draw loan approved on or before August 8, 2020, you must determine the applicability of SBA Form 3508D, Borrower’s Disclosure of Certain Controlling Interests, and complete it if applicable.

• If you did not submit the revenue test details and documentation during the Second Draw loan application process, you must submit the relevant supporting documents.

A complete listing of the documentation required by the SBA:

• See page 12 of the SBA Form 3508 Paycheck Protection Program Loan Forgiveness Application (updated 1-19-21).

• See page eight of the SBA Form 3508EZ Paycheck Protection Program Loan Forgiveness Application (updated 1-19-21).

These loans are just like any other SBA loan. After the payment deferral period ends, you will receive monthly statements and can make payments online, at a branch or by mail. You can obtain a payoff quote by contacting the Business Service Center.

No. Once a PPP loan is paid in full, you can no longer apply for loan forgiveness.

You will not have to make any payments on your loan until we receive the SBA’s decision on your application for loan forgiveness. Once you have submitted your complete forgiveness application, the review process can take as long as 150 days – 60 days for U.S. Bank to complete the lender review process and up to 90 days for the SBA to complete their review under the current guidelines. If you do not submit an application for loan forgiveness within 10 months after the last day of the covered period, you must begin making payments on your loan at that time.

All loans are subject to the updates from the PPP Flexibility Act, regardless of the loan agreement language. Therefore, as long as you submit an application for loan forgiveness within 10 months after the end of your covered period, loan payments will be deferred until we receive the SBA’s decision on your application.

You will be responsible for interest accrued on the portion of the loan that does not qualify for loan forgiveness. Interest accrual begins on the date of disbursement. The loan accrues daily simple interest from the date of disbursement. Based on current SBA guidance, the SBA will pay the bank the loan forgiveness amount, plus any accrued interest on that amount, through the date of payment.

Upon completion our review, we issue our decision to the SBA for their review. Our choices are one of the following:

• Approved in Full: Lender approved in full the forgiveness amount requested by borrower and the forgiveness amount requested by Lender equals that amount.

• Approved in Part: Lender did not approve the full forgiveness amount requested by borrower and the forgiveness amount requested by Lender is less than the forgiveness amount requested by borrower.

• Denied: Lender denied the entire forgiveness amount requested by the borrower.

No. Under current guidance, the SBA will not accept loan forgiveness applications submitted by a borrower that has fully repaid its PPP loan.