Below you will find frequently asked questions regarding the PPP loan forgiveness application. We are updating these FAQs often. If you have a question that is not answered in the FAQs, please reach out to your PMB Relationship Manager.
The following changes were made when the additional COVID-19 relief package was signed into law on December 27, 2020.
Simplified Forgiveness – Form 3508S
Forgiveness applications for loans under $150,000 will be simplified to a one-page certification that includes a description of:
In addition, you’ll need to attest to the accuracy of your certification and that you complied with requirements of the Program. For the new process, the SBA indicates you must keep employment records for four years following the date of submission, and all other records related to PPP and the forgiveness application for a period of three years following the submission of the forgiveness application. In addition, you still may be required to provide documentation to us or to the SBA.
Additional Eligible Expenses
Covered Period Flexibility
Borrowers can elect a covered period that ends at any point between 8-weeks and 24-weeks after loan disbursement. Previously, PPP borrowers that obtained their loans before June 5 could elect either an 8-week or 24-week covered period.
No Forgiveness Reduction Due to EIDL
EIDL advances will no longer reduce the forgiveness amount of loans.
Forgiveness is not taxable as income
PPP loans are now truly not taxable – forgiveness is not taxable as income and the eligible expenses used to obtain forgiveness will be deductible.
Your PMB Relationship Manager will send you a unique link to the online forgiveness portal. If you have not received it yet, please contact your PMB Relationship Manager.
Your PMB Relationship Manager will send you a unique link to the online forgiveness portal. If you have not received it yet, please contact your PMB Relationship Manager.
Based upon your answers to certain questions in the PPP Forgiveness Calculation Tool workbook, and when you enter information in the PPP Forgiveness Portal, you will be informed if your application will be processed using the Form 3508 or the Form 3508EZ, and if qualified for using the Form 3508EZ, you will not be required to calculate and provide certain information.
If your PPP loan was $150,000 or less, you will use Form 3508S when applying for forgiveness in our portal.
No, please prepare a brief memo for your own files that details the facts that support why you qualify for the Safe Harbor (3508EZ). Since the facts will be different for every company, producing a template was not feasible.
When your application has been e-signed, PMB has 60 days to file your application with the SBA. Once filed with the SBA, they have 90 days to render a decision on forgiveness.
You can elect a covered period that ends at any point between 8-weeks and 24-weeks after loan disbursement. Previously, PPP borrowers that obtained their loans before June 5 could elect either an 8-week or 24-week covered period.
The Alternative Payroll Covered Period (“APCP”) has been created specifically for administrative ease for borrowers that have weekly or biweekly payroll cycles. It allows you to identify a time period that aligns with your payroll cycle that is different than the Covered Period, which begins the date your PPP loan is funded and extends for the chosen covered period. The APCP beginning date would be the first date of your applicable payroll that falls within the Covered Period, and is the same length of time as your Covered Period. You don't have to do this, but you can. Again, this only applies to payroll expenses. Other expenses for leases, mortgages and utilities would all still be bound by the Covered Period.
Yes. You can choose an Alternative Payroll Covered Period that begins before the Disbursement date.
You can apply for forgiveness as soon as you reach 100% forgiveness. You do not need to wait until the end of the covered period to apply.
No, the Alternative Payroll Covered Period is reserved for payrolls that are biweekly or more frequent (i.e. weekly).
You will use the PPP Forgiveness Portal to upload digital copies all of your supporting documents. Click here for a list of eligible expense documentation requirements and how to name the digital files for uploading when it comes time to apply for forgiveness.
No, you do not. In fact, you will simplify your forgiveness process if you are able to use only payroll expense, since these are larger amounts and in most cases, you’d have to have many mortgage, lease and/or utility bills to equal just one payroll cycle.
No, you do not.
Forgivable utilities expenses include, electricity, water, gas, sewage, telephone (cell phone and landline), internet, and transportation costs. The SBA has yet to release guidance on which expenses are included under the category of “transportation.” Current understanding of the guidelines is that the same principles will apply to PPP forgiveness as they do for tax filing. This would mean you have two options for tracking expenses that you could choose from to maximize your forgiveness: i) Standard mileage rate – entails tracking your miles driven for business purposes and then multiplying it by the standard mileage rate (set at $0.575 per mile for 2020), or ii) Actual expense method – entails tracking all costs of operating the vehicle in the eight week period. Examples include costs like gas, oil, and repairs.
Enter the beginning and ending dates covered by the annual contract along with the total amount paid for the contract. The PPP Forgiveness Calculation Tool will calculate the pro rata amount of the contract that falls within the Covered Period.
If your lender took tile of real or personal property of the business as collateral for your working capital line, then the interest would be eligible for forgiveness. According to the instructions from the SBA, the interest expense that is eligible for forgiveness only includes 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. Generally, a mortgage is defined as a loan where the lender takes title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.
For self-employed and sole proprietor, you will enter amounts paid or incurred during the Covered Period as Owner Compensation rather than Payroll. Each owner is limited to a $100,000 annualized compensation, prorated for the chosen covered period.
In the Payroll tab in the Loan Forgiveness Calculation Tool there is a section for entering payments for group health insurance. Enter the amounts paid during each payroll cycle.
No, independent contractors have the ability to apply for a PPP loan on their own, so they do not count for purposes of a borrower’s PPP loan forgiveness. They should not be included on a company’s payroll cost.
Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees; and for an independent contractor or sole proprietor, wage, commissions, income, or net earnings from self-employment or similar compensation. The sum of these costs divided by 60% is your “Payroll cost 60% requirement”. If you have not paid or incurred any of these costs during your Covered Period, you will not be eligible for forgiveness.
Select either “Other (less often than every two weeks)” or “Other (more often than every two weeks) from the drop down. A comment field will appear. In the comments, explain the frequencies that you are using.
We are not finding anything explicitly stated in the SBA guidance regarding Union Dues. If you can satisfy 100% forgiveness without the Union Dues, then we suggest doing so rather than risking a denial from the SBA.
Do not include employees that were on furlough, only those that were on the payroll.
In the Loan Forgiveness Calculation Tool there is a section for owner compensation. If owners are paid through regular payroll, then it should be deducted from regular payroll and included in the owner compensation section.
PPP caps business owners to 10 weeks of compensation at a maximum of $100,000 annualized.
Yes, completion of the Loan Forgiveness Calculation Tool is required before applying for Loan Forgiveness with PMB. You will upload the completed workbook to the PPP Forgiveness Portal as a part of your required documentation of eligible expenses. The amounts entered into the forgiveness applications (Form 3508 and Form 3508EZ) are summary/total amounts and the underlying detail input into the Loan Forgiveness Calculation Tool along with the corresponding documentation is necessary for us to perform the review of your forgiveness request required by the SBA.
Please watch our Loan Forgiveness Calculation Tool Demo Video for a detailed overview of the how to use the tool.
Log on to the Loan Application Portal to download the Loan Forgiveness Calculation Tool or contact your PMB Relationship Manager.
We suggest that you update the workbook regularly as you pay your payroll, rent, mortgage and utilities. That way, when your 8 or 24 week covered period has ended, you'll have everything filled out and ready to apply for forgiveness. At the same time, you should be saving digital copies of all supporting documents. Click here for a list of eligible expense documentation requirements and how we suggest you name the digital files for uploading when it comes time to apply for forgiveness.
This is the loan number that identifies your loan in PMB’s system. You can find this loan number through PMB’s online banking platform, Business Online Banking. If you don’t use Business Online Banking, just ask your Relationship Manager for this information.
The “TOP” tab is used to enter basic identifying information, your loan information, and answer the FTE Restoration Test questions. The rest of the information on this tab is driven by what you enter on the other tabs. Your calculated forgiveness amount will show up in the Loan Forgiveness Calculation at the bottom.
The forgiveness reduction analysis determines if your forgiveness amounts will need to be reduced.
First, is the FTE reduction test. There are several exemptions and safe harbors provided by PPP and the PPPFA that will allow you to avoid having a reduction in your forgiveness amount due to a reduction in FTE. If any of the three FTE Restoration Questions are answered with Y, the FTE reduction quotient for the calculation of your forgiveness amount will be 100% and there's no need to complete any of the FTE tabs. If you were not able to answer any of these questions with “Y”, then you will need to calculate the FTE Reduction Quotient:
Second, the salary reduction calculation is calculated on the Salary Red Tab and is used to enter information for eligible employees that earn less than $100,000, who had a decrease in their compensation by more than 25%, even if it has been or is planned to be restored. Eligible employees are those employees whose principal residence is in the United States.
If you answer yes to any three of these FTE Reduction safe harbors and you have not had any salary reductions, you qualify to use the Form 3508EZ. A message will appear in this section of the “TOP” tab if this is the case.
The “File Naming” tab lists out the various forms of supporting documentation for the eligible expenditures and how to name the digital files for uploading when it comes time to apply for forgiveness. You can also find this information here.
Tabs PPP and PPP-A are the SBA Form 3508 schedules. These are populated by all the other tabs. No input from you is required in either tab. You'll use the information in these tabs when the time comes to input information into the PPP Forgiveness Portal if you are required to use the Form 3508.
Tab PPP-EZ is the SBA Form 3508EZ. This tab is populated by all of the other tabs and no input is required from you. If you qualify to use the 3508EZ, you will only be required to enter the information on this tab into the PPP Forgiveness Portal.
This tab is only used to enter information for eligible employees that earn less than $100,000, who had a decrease in their compensation by more than 25%, even if it has been or is planned to be restored. Eligible employees are those employees whose principal residence is in the United States. If you had no reduction in salary, you do not need to use this tab.
These tabs determine your average FTE for the three FTE reference periods defined by the SBA. The names of the corresponding FTE tabs are typed out next to the cells that they populate on the “TOP” tab to help you easily navigate the tool. You'll not need to enter anything in the FTE Tabs if you are qualified for using the 3508-EZ Form, based upon the questions asked in the “TOP” tab.
The “Payroll” tabs are used to enter data for your eligible expenditures for payroll. There are three payroll tabs, A, B, and C that can be used if you have more than one payroll type. If you only use one payroll type, just use the “Payroll-A” tab.
At the bottom of this tab, you will see your payroll allocation calculations. This calculation looks at the number of days in each of the payroll periods, as well as how many of those days are within your covered period or alternative payroll covered period to calculate the percentage of each payroll period that can be applied to forgiveness.
The green totals from each of the payroll tabs are carried over to the “TOP” tab under total payroll and line one of the SBA Form 3508 in the PPP tab. The blue totals from each of the payroll tabs are carried over to the PPP-A tab for the corresponding line items in the Schedule A for SBA Form 3508.
The “Mortgage” tabs are used to enter data for your eligible expenditures for mortgage. This tab allows up to three mortgages to be entered. If you happen to have more than three mortgages, use the additional "Mortgage B" and "Mortgage C" tabs.
Remember that only the interest portion of your mortgage payment is an eligible expense for forgiveness, the principal is not. Calculations will be made to determine how many days in each loan period were within your covered period. That percentage is then calculated against the interest amount only to get the mortgage amount that can be applied to forgiveness.
At the bottom of each of these tabs, you can view the tally for your eligible mortgage interest highlighted in green. This total is carried over to the top tab under eligible mortgage interest payments, and line two of the SBA Form 3508 in the PPP tab.
The “Lease” tabs are used to enter data for your eligible expenditures for leases. this tab allows up to three leases to be entered. If you happen to have more than three leases, use the additional "Lease B" and "Lease C" tabs.
Only rent from lease agreements in force before February 15th, 2020 are eligible for forgiveness.
Calculations will be made to determine how many days in each lease period were within your covered period. That percentage is then calculated against your total rent payment to get the rental amounts that can be applied to forgiveness. At the bottom of these tabs, you can view the tally for your eligible Rent Expense highlighted in green. This total is carried over to the top tab under eligible lease rent payments, and line three of the SBA Form 3508 in the PPP tab.
The “Utility” tabs are used to enter data for your eligible expenditures for utilities. You can enter up to six utilities on each tab. This workbook allows up to a total of 18 utility vendor/property payments to be entered. If you happen to have more than 18 vendor/property payments, please let your banker know so that we can work with you to expand the workbook as needed.
Calculations will be made to determine how many days in each service period were within your covered period. That percentage is then calculated against your monthly utility cost to get the utility amount that can be applied to forgiveness.
At the bottom of this tab, you can view the tally for your eligible utility expenses highlighted in green. This total is carried over to the top tab under Schedule A, B and C respectively and line four of the SBA Form 3508 in the PPP tab.
You do not need to itemize these within the workbook. However, the SBA application does require an itemization of cash compensation, health insurance compensation, employee retirement plan contributions, and state/local taxes.
If your loan was approved prior to the enactment of the PPPFA on June 5, 2020, the provisions of PPPFA required changes to some of the terms of your Note. Please see the Notice showing the original provisions and the new provisions as changed by the PPPFA. You should have received a request to sign an acknowledgement of these changes. If you have not received this notice, please contact your Relationship Manager to have a copy resent to you for signature.
No payments are due on this loan until the date that SBA remits the Borrower’s loan forgiveness amount to the Lender, or, if the Borrower does not apply for loan forgiveness, 10 months after the end of the Borrower’s twenty-four week loan forgiveness covered period. Interest will continue to accrue during the deferment period. Lender will notify Borrower of the date of SBA’s remittance of the loan forgiveness amount to Lender, the amount, if any, which is not forgiven by SBA, and the due date and amount of the monthly payment.
No principal or interest payments shall be due until expiration of the Initial Deferment Period. Commencing on the first (1st) monthly anniversary of the Note Date after expiration of the Initial Deferment Period (“Payment Start Date”) and continuing on the same day of each month thereafter, Borrower shall make a monthly principal payment on the outstanding principal balance (after application of any loan forgiveness) in an amount that shall fully amortize the outstanding principal balance of the Loan by the Maturity Date. Accrued interest shall be due and payable with each monthly principal payment. Lender will apply each installment payment first to pay interest accrued to the day Lender received the payment, then to bring principal current, and apply any remaining balance to reduce principal. The Note is payable in full on the Maturity Date without further demand or action of the Lender.