Paycheck Protection Program (PPP) loan forgiveness guidelines

Documents for PPP loan forgiveness

If you were one of the millions of businesses approved for SBA Paycheck Protection Program (PPP) loans, your next step is applying for loan forgiveness.

We’ve compiled the information available based on the latest guidelines from the SBA and the U.S. Department of the Treasury. Check back here often for updates, as the guidance is subject to change regularly.

You can start applying 8 weeks after your loan was deposited. However, since guidelines are still being finalized in the coming weeks, it could be beneficial to wait to apply for loan forgiveness until the information is finalized.

How to prepare for PPP loan forgiveness

You could be eligible to have up to 100% of your loan forgiven⁠—meaning you won’t have to repay the principal or any interest—if you follow the program guidelines and meet certain criteria.

What to prepare for PPP Loan Forgiveness

How to apply for loan forgiveness

At the end of the 8-week period, you can begin to apply for loan forgiveness directly through your lender. You’ll need to provide:

  • Details on how you used your PPP loan.
  • Information on whether your payroll and number of employees stayed consistent throughout the 8-week period.
  • Documentation verifying your responses on the above. 

How the loan forgiveness amount is calculated

To calculate how much of your loan can be forgiven, your lender will use the responses from your application to:

  1. Determine the maximum amount of possible loan forgiveness. This is based on how much you spent on payroll and other eligible expenses like rent and utilities during the 8-week period. 
  2. Calculate the amount (if any) by which the maximum loan forgiveness will be reduced. If you chose to reduce your number of employees or their salaries during the period, this will reduce the amount of your loan that can be forgiven.
  3. Understand how much of your loan was used on eligible expenses. Only 25% of your PPP loan can be used for expenses other than payroll for certain business structures. If you used more than 25% on non-payroll expenses, your forgiveness amount will be reduced.

Once the amount is calculated, your lender will submit the information to the SBA and will notify you within 60 days regarding how much loan forgiveness you qualify for.

How to apply for a Paycheck Protection Program (PPP) loan

Companies like Kabbage are accepting PPP loan applications on a first come first served basis. All you have to do is submit your business information and the necessary documents needed for the PPP loan. Kabbage will quickly and securely review your information and let you know how much you can access, up to $2 million. If your small business is approved, securely connect your bank account to have funds deposited as soon as you’re ready.

To learn more about PPP loans, visit our Paycheck Protection Program frequently asked questions.

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