PPP Loan Forgiveness

Paycheck Protection Program (PPP) borrowers may be eligible for loan forgiveness

Success Alert

Updated May 5, 2021

The Economic Aid Act, passed by Congress has provided updates to the PPP Loan Forgiveness rules. The SBA has provided three new forgiveness forms, including a new simplified version for PPP loans under $150,000 that will significantly reduce the amount of effort and required documents needed to apply. We have implemented the necessary changes in our forgiveness portal to support the new rules and are now accepting forgiveness applications.

Loan Forgiveness Forms

The following forms may be requested as part of your loan forgiveness. Please download and save the forms prior to accessing the Loan Forgiveness Application Portal. You do not need to complete your form manually; our forgiveness portal will facilitate the completion and electronic signing of the forgiveness form. Not sure what forms you will need? Please see the below FAQs for more information.

Loan Forgiveness Application Steps 

PLEASE NOTE: The following steps reflect the forgiveness application process based on current legislation. We will continue to monitor and amend as new information becomes available. The following information below is for your reference only.

  1. Access BECU's PPP loan forgiveness portal
  2. Enter the SBA loan number or Lender loan number and PPP loan amount to log into the portal
  3. Validate or update the existing application information 
  4. Complete all required fields
  5. Complete the online workbook or manual data entry for the forgiveness calculation
  6. Upload supporting documentation and forms
  7. Review and e-sign the automatically generated forgiveness application
  8. Submit your completed forgiveness application
Business 2021 PPP Infographic

Required Documentation

You must provide documentation to substantiate your certification of a 25 percent gross receipt reduction by providing one of the following:

  • Audited quarterly financial statements – If your financial statements have not been audited, you must sign and date the first page of the financial statement and initial all other pages to attest to their accuracy.
  • Quarterly or monthly bank statements – Statements must be from a time period showing the deposits from relevant quarters. You must annotate, if not clear, which deposits on the bank statement constitute gross receipts and which do not.
  • Annual IRS income tax filings – If you have not yet filed a 2020 tax return, you must fill out the return forms, compute the relevant gross receipts value 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.

Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following:

  • Salary/Wages
    • Bank account statements or third-party payroll service provider reports; and
    • Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period.
    1. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
    2. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.
  • Health Insurance and Retirement Plans
    • Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions included in the forgiveness amount.
  • If you checked only the second box on the checklist on page 1 of the SBA Form 3508EZ instructions, provide documentation supporting the average number of full-time equivalent employees on payroll employed by the Borrower on January 1, 2020 and at the end of the Covered Period.

Non-Payroll: Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period.

  • Business mortgage interest payments
    • Lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments; or
    • Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments during the Covered Period.
  • Business rent or lease payments
    • Lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments; or
    • Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period.
  • Business utility payments
    • Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.
  • If a Government Official, or the spouse of a Government Official has controlling interest in the business applying for forgiveness, you are required to submit the Borrower's Disclosure of Certain Controlling Interests (PDF) form with your forgiveness application.

All items noted under the EZ Form Application Documentation in addition to:

  • FTE: Documentation showing:
    • The average number of FTE employees on payroll per week employed by the Borrower between February 15, 2019 and June 30, 2019;
    • The average number of FTE employees on payroll per week employed by the Borrower between January 1, 2020 and February 29, 2020; or.
    • In the case of a seasonal employer, the average number of FTE employees on payroll per week employed by the Borrower between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive 12-week period between May 1, 2019 and September 15, 2019.

The selected time period must be the same time period selected for purposes of completing PPP Schedule A, line 11. Documents may include payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941) and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state. Documents submitted may cover periods longer than the specific time period.

Loan Forgiveness Frequently Asked Questions

Please note: these FAQs are not intended as legal advice nor as an official interpretation of the rules. Due to the complexities of the program, we may learn of inaccuracies to our current understanding. We will update these FAQs to the best of our ability as new information becomes available.

PLEASE NOTE: The following information reflects the forgiveness application process based on the current legislation. We are continuing to monitor the status of proposed changes that may alter the process, documentation requirements, and application forms. The information below is for your reference only.

The SBA issued its initial forgiveness guidance in Section III, subsection 2(o) of its Interim Final Rule 1 (PDF) as is found on the U.S. Treasury PPP loan website.

And, in response to the recent amendments to the CARES Act adopted by Congress, the SBA has issued an Interim Final Rule on Revisions to First Interim Final Rule (PDF) which modifies certain aspects of the SBA's Interim Final Rule 1 and can be found on the U.S. Treasury PPP loan website.

The SBA has also issued various FAQs that directly or indirectly address elements of loan forgiveness (PDF) as set forth on the U.S. Treasury PPP loan website.

In response to the Economic Aid Act adopted by Congress, the SBA has posted the Paycheck Protection Program Loan Forgiveness Application (PDF) form and instructions on the U.S. Treasury PPP loan website. A EZ Loan Forgiveness form (PDF) and instructions have also been made available. More recently, the SBA released a simplified Forgiveness Application form (PDF) for PPP loans under $150,000.

You should continue to monitor the PPP loan page on the U.S. Treasury website for any updates.

Borrowers are eligible for loan forgiveness for the following costs:

  • Eligible payroll costs. Borrowers are generally eligible for forgiveness for the payroll costs paid and payroll costs incurred during the Covered Period or Alternative Payroll Covered Period. Payroll costs are considered paid on the day that paychecks are distributed or the Borrower originates 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 Borrower's last pay period of the Covered Period or Alternative Payroll 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 or Alternative Payroll Covered Period. For each individual employee, the total amount of cash compensation eligible for forgiveness may not exceed an annual salary of $100,000, as prorated for the covered period. Count payroll costs that were both paid and incurred only once. For information on what qualifies as payroll costs, see Interim Final Rule on Paycheck Protection Program posted on April 2, 2020 (85 FR 20811).
  • Eligible nonpayroll costs. Nonpayroll costs eligible for forgiveness consist of the following costs to the extent 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:
    • Covered mortgage obligations: payments of interest (not including any prepayment or payment of principal) on any business mortgage obligation on real or personal property incurred before February 15, 2020 ("business mortgage interest payments");
    • Covered rent obligations: business rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020 ("business rent or lease payments"); and
    • Covered utility payments: business payments for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020 ("business utility payments").
    • Eligible nonpayroll costs cannot exceed 25% of the total forgiveness amount.

Recent changes to the program allow you to use a “Covered Period” of your choosing between 8 and 24 weeks.

For certain of the calculations outlined in the Paycheck Protection Program Loan Forgiveness Application, the SBA allows a Borrower with a biweekly (or more frequent) payroll schedule to elect to calculate eligible payroll costs using the Covered Period that begins on the first day of their first pay period following their PPP Loan Disbursement Date, which is referred to by the SBA as the “Alternative Payroll Covered Period.”

 

Borrowers are eligible for loan forgiveness for the following costs:

  • Eligible payroll costs. Borrowers are generally eligible for forgiveness for the payroll costs paid and payroll costs incurred during the Covered Period or Alternative Payroll Covered Period. Payroll costs are considered paid on the day that paychecks are distributed or the Borrower originates 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 Borrower's last pay period of the Covered Period or Alternative Payroll 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 or Alternative Payroll Covered Period. For each individual employee, the total amount of cash compensation eligible for forgiveness may not exceed an annual salary of $100,000, as prorated for the covered period. Count payroll costs that were both paid and incurred only once. For information on what qualifies as payroll costs, see Interim Final Rule on Paycheck Protection Program posted on April 2, 2020 (85 FR 20811).
  • Eligible nonpayroll costs. Nonpayroll costs eligible for forgiveness consist of the following costs to the extent 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:
    • Covered mortgage obligations: payments of interest (not including any prepayment or payment of principal) on any business mortgage obligation on real or personal property incurred before February 15, 2020 ("business mortgage interest payments");
    • Covered rent obligations: business rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020 ("business rent or lease payments"); and
    • Covered utility payments: business payments for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020 ("business utility payments").
    • Business software or cloud computing services that facilitate 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;
    • 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.
    • Expenditures made to suppliers for certain goods in connection with a borrower's business; and (4) costs incurred in connection with compliance with COVID-19 related health and safety guidelines, including sanitation standards, social distancing requirements, and other worker or customer safety measures related to COVID-19.
    • Eligible nonpayroll costs cannot exceed 40% of the total forgiveness amount.

The amount of loan forgiveness may be subject to reduction if the Borrower has failed to maintain headcount as explained in Schedule A of the Payment Projection Program Loan Forgiveness Application.

  • The loan forgiveness amount may be reduced if the Borrower's average weekly FTE employees during the Covered Period (or the Alternative Payroll Covered Period if selected by the Borrower) was less than during the Borrower's chosen reference period, which must be:
    • February 15, 2019 to June 30, 2019; or
    • January 1, 2020 to February 29, 2020; or
    • In the case of seasonal employers, either of the preceding periods or a consecutive twelve-week period between May 1, 2019 and September 15, 2019

    Please note that we are anticipating additional SBA guidance regarding the above.

  • The Borrower is exempt from such a reduction if both of the following conditions are met:
    • The Borrower reduced its FTE employee levels in the period beginning February 15, 2020, and ending April 26, 2020; and
    • The Borrower then restored its FTE employee levels no later than June 30, 2020 to its FTE employee levels in the Borrower's pay period that included February 15, 2020

    Please note that we are anticipating additional SBA guidance regarding the above.

    • The Borrower's eligibility for loan forgiveness will not be reduced as a result of a former employee declining a good faith, written and documented offer of rehire after the Borrower initially laid off that employee.
    • If a Borrower is unable due to circumstances beyond the Borrower's control to rehire previously employed individuals or similarly qualified employees, the Borrower will generally not have its loan forgiveness amount reduced based on the reduction in full-time equivalent employees.
    • The Borrower's forgiveness eligibility will not be reduced if an employee is terminated for just cause, voluntarily resigns, or voluntarily requests and receives a reduction in hours.

If you have already submitted a PPP loan forgiveness application, we are currently reviewing submitted applications for completeness based on the program's current guidelines. Lenders have 60 days upon receiving a completed PPP loan forgiveness application to submit their recommendation to the SBA. The SBA has 90 days to render their final decision on the amount they will forgive. Requests for additional information and status updates will be sent to the email address on file.

You should carefully review the instructions that accompany the EZ Loan Forgiveness Application form, but you may generally use the EZ Loan Forgiveness Application form if at least one of the following scenarios applies to you:

  • You are a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form (SBA Form 2483).
  • You did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period (as defined below) compared to the period between January 1, 2020 and March 31, 2020; AND you did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period.
  • You did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period (as defined below) compared to the period between January 1, 2020 and March 31, 2020; AND was unable to operate during the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.
 

BECU has implemented a forgiveness portal that should make applying and uploading supporting documentation quick and easy, while eliminating the need for you to manually fill out the Loan Forgiveness Application. We highly recommend applying through our PPP Loan Forgiveness portal as it will allow us to quickly process your loan forgiveness application and submit it to the SBA via automated processes.  The portal will also provide a channel for updates in the SBA loan forgiveness process.

Our forgiveness portal is open and accepting applications. A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan—including before the end of the covered period—if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness.

You must apply for forgiveness no more than 10 months after the last day of a 24-week Covered Period regardless of the length of Covered Period you chose. You will be expected to start making payments on your loan after this timeframe.

Carefully review the requirements in the Paycheck Protection Program Loan Forgiveness Application (PDF) form, EZ form (PDF), or Forgiveness Application for PPP loans under $150,000 (PDF), along with applicable instructions on the U.S. Treasury PPP loan website before you begin to assemble the relevant documentation.

Continue to document your payroll costs and other expenses during the term of your loan. You should also consult your tax, legal or financial advisor. If you have any questions about whether and how to qualify for forgiveness, get professional advice and regularly check the U.S. Treasury SBA PPP website for additional guidance.

We anticipate that you will receive BECU's assessment regarding the amount of your loan that is eligible for forgiveness within 60 days of receipt of the forgiveness application. BECU's assessment remains subject to final approval by the SBA; and the SBA is supposed to provide their approval, modified approval or rejection within 90 days after receipt of BECU's assessment.

If you apply for forgiveness within 10 months after the end of a 24-week Covered Period, you do not have to make a payment until the SBA determines a final decision on your forgiveness amount. If the SBA approves your loan for full Forgiveness, you will not have to make any payments. If you do not submit a complete forgiveness application within 10 months after the end of your Covered Period, you will need to start making payments at that time.

If the SBA declines to forgive all or any portion of your loan, you will be responsible to pay the unforgiven portion of your loan in accordance with the terms of your promissory note. Outstanding balances will be payable starting approximately ten months following expiration of the Covered Period so long as you do not then have a pending forgiveness application that has been submitted.

If you disagree with the SBA's decision regarding your forgiveness amount, you might have the opportunity under SBA rules to appeal directly to the SBA. Please do not send any appeals to BECU as BECU does not have the right or ability to process appeals of SBA decisions. Furthermore, please be aware the SBA has issued specific timeline and process rules respecting appeals, so you will likely want to quickly familiarize yourself with the Interim Final Rule on Appeals of SBA Loan Review Decision (PDF) if you think you might want to appeal the SBA's decision.

The Economic Aid Act repealed the requirement that your EIDL loan be deducted from your forgiveness amount. If you have already completed your forgiveness application that resulted in the reduction of your EIDL from your forgiveness amount, the SBA has confirmed that a reconciliation payment will be sent to BECU to be applied to your outstanding loan balance.  The SBA has not committed to a timeframe for reconciling EIDL reductions, please allow the SBA to complete their work on enacting Forgiveness changes set forth by the Economic Aid Act. We will share more information with our impacted borrowers as it becomes available.

You may apply for a Second Draw PPP Loan once you have utilized the loan proceeds from your First Draw PPP Loan in their entirety on or before the date of your Second Draw PPP loan disbursement.