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Steps for PPP Loan Forgiveness

Steps for PPP Loan Forgiveness

If you received a PPP loan, here is what you need to know - track and document everything. Keep detailed records of your expenses! Supporting documentation is necessary for potential loan forgiveness, and for a possible audit by the SBA in the future. The SBA has already issued interim guidance for loan forgiveness as discussed below, and we expect final guidelines any day.

The loan might be forgiven if at least 75% of the funds were used for payroll costs. The remaining funds can be used for eligible interest on mortgage loans, rent, and utilities (those in effect prior to February 15, 2020).

The amount of forgiveness of a PPP loan depends on the borrower’s payroll costs over an eight-week period. The eight-week period begins on the date the lender makes the first disbursement of the PPP loan to you.

PPP loan forgiveness is not dollar for dollar. Reductions can occur depending on how you spend your loan proceeds. There are two main situations that will reduce your loan's forgiveness, therefore it is important that you avoid these actions: