Paycheck Protection Program Forgiveness Resource Center

A: First Bank & Trust, a division of HTLF Bank customers must use our online PPP Forgiveness Portal; we are not able to accept paper applications. After logging into the portal, choose Forgiveness Application from the marketplace on the left-hand navigation. As you answer questions, you will be guided to the appropriate PPP Forgiveness Application.  

A: Customers who received a PPP Loan from our bank can apply for Forgiveness using our online PPP Portal. Depending on how the funds were used, customers are eligible to receive full or partial forgiveness.

A: Customers will need to access the PPP Online Portal and complete the PPP Forgiveness application found in the left-hand navigation under marketplace.  After completing the application customers must attach the required documentation to complete the forgiveness submission process. The deadline for applying for PPP Loan Forgiveness is ten months after the completion of the Covered Period. Customer may select either (1) a 24-week (168-day) period beginning on the PPP Loan disbursement date, or (2) an eight-week (56-day) Covered Period.
 
The SBA has also provided a shortened application (3508S and 3508EZ ) for applicants who meet certain criteria. These applications are  available through the bank’s PPP Forgiveness online application. Customers will answer and compete certifications for specific  criteria for each application. The shortened applications do not result in a different forgiveness amount than the longer application process. As customers complete the application in the forgiveness portal, it will automatically select the appropriate application relevant to a customer’s situation (and their certifications). Customers do not need to reach out to the bank for the shortened application form.

The 3508S simplified one-page application is only allowed for PPP Loans of $150,000 or less.

Customers do not need to submit supporting documentation with the 3508S forgiveness application, however, the SBA may request supporting documentation related to loan forgiveness amount calculations in the future. Therefore, it is recommended that borrowers retain this documentation for six years.

The 3508EZ simplified application and 3508 application are for loans over $150,000, and the appropriate application will be created based on answers provided in the application.  

Customers are required to provide required supporting documentation for eligible payroll costs and non-payroll costs with the application. 

A. No. The privacy and security of our customer’s information is our highest priority. The bank will only provide direct access to the PPP Forgiveness Portal to our customers to apply for forgiveness for their PPP Loan.

A: Covered Period: The Covered Period is either (1) the 24-week (168-day) period beginning on the PPP Loan Disbursement Date, or (2) the Borrower may elect to use an eight-week (56-day) Covered Period. For example, if the Borrower is using a 24-week Covered Period and received its PPP loan proceeds on Monday, April 20, the first day of the Covered Period is April 20 and the last day of the Covered Period is Sunday, October 4. In no event may the Covered Period extend beyond December 31, 2020. 

A: If the loan was funded prior to June 5, 2020, there is a minimum maturity period of two years. Any loans funded after June 5, 2020, have a minimum maturity of five years.

A: The CARES Act lists two categories of expenses that are forgivable. These include "Eligible payroll costs" and "Eligible non-payroll costs". This means that your PPP loan is forgivable to the extent you spend the proceeds of your loan on these two categories, provided you maintain the headcount and salaries of employees at the same pre-Covid-19 level, the loan will be forgiven. Another important requirement is that you actually pay for these expenses during the “covered period”.  Based on the Paycheck Protection Program Flexibility Act of 2020 signed into law on 6/5/20, at least 60% of the PPP Loan must be spent on "Eligible payroll costs" and up to 40% may be spent on "Eligible non-payroll costs".

Eligible Payroll Costs:

• Compensation to employees
• Employer contributions for employee health insurance
• Employer contributions to employee retirement plans
• Employer state and local taxes assessed on employee compensation

Eligible Non-payroll Costs:

• Interest on Covered Mortgages
• Expenses for Rent or Lease Payments
• Utility Expenses
• Covered Property Damage 
• Covered Supplier Costs 
• Covered Worker Protection Expenditures

A: Customers will owe money when the PPP loan is due if they use the loan amount for anything other than payroll costs, and eligible non-payroll expenses during the covered period after getting the loan. Not more than 40% of the forgiven amount may be for non-payroll eligible expenses.

They will also owe money if they do not maintain their staff and payroll.

• Number of Staff: A customer’s  loan forgiveness will be reduced if customers decrease their full-time employee headcount.
• Level of Payroll: Loan forgiveness will also be reduced if customers decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.

A: Borrowers are generally eligible for forgiveness for the payroll costs paid and payroll costs incurred during the 24-week (168-day) or 8-week (56-day) 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 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 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) (as amended by the Revisions to First Interim Final Rule, posted on June 11, 2020). Include only payroll costs for employees whose principal place of residence is in the United States.

A: Sum of Included payroll cost – sum of Excluded payroll costs = Payroll Costs

Included Payroll Cost:

1. For Employers: The sum of payments of any compensation with respect to employees that is a: 
   • salary, wage, commission, or similar compensation;
   • payment of cash tip or equivalent;
   • payment for vacation, parental, family, medical, or sick leave
   • allowance for dismissal or separation
   • payment for group health care and retirement benefits
   • payment of state or local tax assessed on the compensation of the employee
2. For Sole Proprietors, Independent Contractors, and Self-Employed Individuals: The net income not more than $100,000 in one year

Excluded Payroll Cost: 

1. Compensation of an individual employee in excess of an annual salary of $100,000 (note: employer contributions to healthcare and retirement benefits are not part of the amount deemed in excess of $100,000 annual salary)
2. The employer portion of payroll taxes
3. Any compensation of an employee whose principal place of residence is outside of the United States
4. Qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116–  5 127); or qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act

A: The amount of loan forgiveness calculated above is reduced if there is a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees.
The forgiveness amount will also be reduced if a customer spent greater than 40% on non-payroll costs.

For employees who earned $100,000 or less in 2019 (or were not employed by the borrower in 2019), the borrower’s loan forgiveness will be reduced for each employee whose average pay (salary or hourly wage) during the 24-week period is less than 75% of their average pay from the full quarter prior to the 24-week period (for most borrowers: January 1 to March 31, 2020). The amount of the reduction in loan forgiveness is based on the amount of the reduction in pay.

Borrowers can avoid having their loan forgiveness amount reduced if they restore an employee’s pay. Specifically, if by no later than December 31, 2020, the employee’s annual salary or hourly wage is equal to or greater than their annual salary or hourly wage on February 15, 2020, the borrower’s loan forgiveness is not reduced.

A: Reductions in employment or wages that occur between February 15, 2020, and December 31, 2020, shall not reduce the amount of loan forgiveness IF by or on December 31, 2020, the borrower eliminates the reduction in employees or reduction in wages.

A: The PPP Flexibility Act gives leniency to businesses that make reasonable efforts to replace or rehire staff but are unable to do so. The employer must demonstrate a “good faith” written offer to rehire at the same salary/wage, with a written denial of the offer from the employee.

A. The following should be supported with documentation: 

• Good faith offer made and declined by past employee at same pay
• Employee requests reduced schedule 
• Fired for cause 
• Employee resigns 
• Employee voluntarily retires 

Employees (non-owners) who work 40 hours per week = 1 FTE
Employees (non-owners) who work <40 hours per week - .50

Alternatively, you may average the hours paid per week, divide by 40, and round to the nearest tenth.
For example, a 30 hour per week employee would be 30/40 -.75 – round to nearest tenth - .80 versus the .50 in the simplified calculation.

A: Non-payroll costs eligible for forgiveness consist of:

• Covered mortgage obligations: payments of mortgage 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, telephone, transportation, or internet access for which service began before February 15, 2020 (“business utility payments”).
• Covered property damage costs: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the costs were related to property damage and vandalism or looting due to public disturbances that occurred during 2020 and such costs were not covered by insurance or other compensation.
• Covered supplier costs: Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods), copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.
• Covered worker protection expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the expenditures were used by the Borrower to comply with applicable COVID-19 guidance during the Covered Period.
   

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. Eligible non-payroll costs cannot exceed 40% of the total forgiveness amount. Count non-payroll costs that were both paid and incurred only once.

A. The deadline for applying for PPP Loan Forgiveness is ten months after the completion of the Covered Period. The Covered Period is either (1) the 24-week (168-day) period beginning on the PPP Loan disbursement date, or (2) the borrower may elect to use an eight-week (56-day) Covered Period.

A. If all or part of the PPP Loan is not forgiven we will be providing a statement notice in advance of a first payment indicating the amount of the payment. If a borrower does not apply for loan forgiveness within ten months of the last day of the covered period, the deferral will end at that time.

A. Documents that Each Borrower Must Maintain but is Not Required to Submit 

• All records relating to the Borrower’s PPP loan, including documentation submitted with its PPP loan application, documentation supporting the Borrower’s certifications as to its eligibility for a PPP loan, documentation necessary to support the Borrower’s loan forgiveness application, and documentation demonstrating the Borrower’s material compliance with PPP requirements.
• The Borrower must retain all such documentation in its files for six years after the date the loan is forgiven or repaid in full, and permit authorized representatives of SBA, including representatives of its Office of Inspector General, to access such files upon request. 

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: 

• 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: i. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and ii. 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, cancelled 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: Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period. 

• Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or 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. 
• Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments. 
• 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. 
• Covered property damage costs: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the costs were related to property damage and vandalism or looting due to public disturbances that occurred during 2020 and such costs were not covered by insurance or other compensation.
• Covered supplier costs: Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods), copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.
• Covered worker protection expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the expenditures were used by the Borrower to comply with applicable COVID-19 guidance during the Covered Period.
   

A: You (the Borrower) can apply for forgiveness of your Paycheck Protection Program (PPP) loan using this SBA Form 3508EZ if you meet at least one of the three following conditions: 

1. The Borrower is 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).



2. The Borrower 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 (for purposes of this statement, “employees” means only those employees that did not receive, during any single period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000);

   AND

   The Borrower 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. (Ignore reductions that arose from an inability to rehire individuals who were employees on February 15, 2020 if the Borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020. Also ignore reductions in an employee’s hours that the Borrower offered to restore and the employee refused. See 85 FR 33004, 33007 (June 1, 2020) for more details.

3. The Borrower 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 (for purposes of this statement, “employees” means only those employees that did not receive, during any single period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000);

   AND

   The Borrower 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.

A: Borrowers using form 3508 and 3508EZ will need to provide the following:

Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or Alternative Covered Period.

• Bank account statements or third-party payroll service provider reports documenting the amount cash compensation paid to employees.
• Tax forms or third-party payroll reports that overlap with the Covered Period or Alternate 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 would be reported, to the relevant state.
• Payment receipts, cancelled 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.

Borrowers using Form 3508 And Form 3508EZ will need to provide the following:

 Payroll Expenses: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or Alternative Covered Period.

• Bank account statements or third-party payroll service provider reports documenting the amount cash compensation paid to employees.
• Tax forms or third-party payroll reports that overlap with the Covered Period or Alternate 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 would be reported, to the relevant state.
• Payment receipts, cancelled 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.
• If you checked only the second box on the checklist to determine the ability to use the EZ form, 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 Expenses: Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period.

• Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or 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.
• Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.
• 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.
• Covered operations expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.
• Covered property damage costs: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the costs were related to property damage and vandalism or looting due to public disturbances that occurred during 2020 and such costs were not covered by insurance or other compensation.
• Covered supplier costs: Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods), copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.
• Covered worker protection expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the expenditures were used by the Borrower to comply with applicable COVID-19 guidance during the Covered Period.