• NJSBDC Network

Updated Information on PPP Loan Forgiveness

SOURCE: SBA.gov


Borrowers may be eligible for loan forgiveness if the funds were used for eligible payroll costs, payments on business mortgage interest payments, rent, or utilities during either the 8- or 24-week period after disbursement. A borrower can apply for forgiveness once it has used all loan proceeds for which the borrower is requesting forgiveness. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred and borrowers will begin making loan payments to their PPP lender.

Frequently Asked Questions about PPP Loan Forgiveness (10-13-2020)

How to Apply for Loan Forgiveness

1. Contact your PPP Lender and complete the correct form Your Lender can provide you with either the SBA Form 3508, SBA Form 3508EZ, SBA Form 3508S, or a Lender equivalent.

The 3508EZ and the 3508S are shortened versions of the application for borrowers who meet specific requirements. Your Lender can provide further guidance on how to submit the application.

2. Compile your documentation


Payroll (provide documentation for all payroll periods that overlapped with the Covered Period or the Alternative Payroll Covered Period):

  • Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.

  • 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:

  • > 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.

  • Payment receipts, canceled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the borrower included in the forgiveness amount.

Non-payroll (for expenses that were incurred or paid during the covered period and showing that obligations or services existed prior to February 15, 2020):

  • Business mortgage interest payments: Copy of lender amortization schedule and receipts verifying payments, or lender account statements.

  • Business rent or lease payments: Copy of current lease agreement and receipts or canceled checks verifying eligible payments.

  • Business utility payments: Copies of invoices and receipts, cancelled checks or account statements.

This list of documents required to be submitted to the Lender is not all-inclusive.

3. Submit the forgiveness form and documentation to your PPP Lender Complete your loan forgiveness application and submit it to your Lender with the re­quired supporting documents and follow up with your Lender to submit additional documentation as requested. Consult your Lender for additional guidance and provide requested documentation in a timely manner.

4. Continue to communicate with your Lender throughout the process If SBA undertakes a loan review of your loan, your Lender will notify you of the review and the SBA loan review decision. You have the right to appeal certain SBA loan review decisions. Your Lender is responsible for notifying you of the forgiveness amount paid by SBA and the date on which your first payment will be due, if applicable.

Please Note:

If applicable, SBA will deduct any EIDL advance amount you have received from the forgiveness amount remitted to the Lender, as required by section 1110(e)(6) of the CARES Act. Borrowers are required to retain certain documents for six years after the date the loan is forgiven or repaid in full. Download this forgiveness guidance as a PDF.

Forgiveness Forms and Instructions:

  • SBA Form 3508 Paycheck Protection Program Loan Forgiveness Application (Spanish version)

  • > Instructions for the SBA Form 3508 Paycheck Protection Program Loan Forgiveness Application

  • SBA Form 3508EZ Paycheck Protection Program Loan Forgiveness Application

  • > Instructions for the SBA Form 3508EZ Paycheck Protection Program EZ Loan Forgiveness Application

  • SBA Form 3508S Paycheck Protection Program Forgiveness Application 

  • > Instructions for the SBA Form 3508S Paycheck Protection Program 3508S Forgiveness Application

Who Can Apply


The following entities affected by Coronavirus (COVID-19) may be eligible:

  • Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)

  • Sole proprietors, independent contractors, and self-employed persons

  • Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location

  • Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:

  • > 500 employees, or

  • > That meets the SBA industry size standard if more than 500


READ MORE:


Funded in part through a Cooperative Agreement with the U.S. Small Business Administration, The New Jersey Small Business Development Centers (NJSBDC) network is also funded by the State of New Jersey and is hosted by Rutgers Business School: Network and New Brunswick.

© 2020, NJSBDC Network

  • Facebook
  • Twitter
  • YouTube