Paycheck Protection Program Loan Forgiveness
As you are aware, Paycheck Protection Program Loans may be partially or completely forgiven if you meet the conditions set by the Small Business Administration. If you received your PPP loan through Royal Credit Union, you will need to submit your loan forgiveness request through us as well. Like many other financial institutions, we are not currently accepting loan forgiveness applications at this time. The SBA guidance regarding forgiveness continues to evolve and the U.S. Congress is also considering action to simplify the forgiveness process even further for borrowers. In the meantime, we are working hard to build and adapt our systems to make it as easy as possible for you once we open.
We are targeting October to open our online loan forgiveness application process. We will update this page and will be sending an email to all of our PPP borrowers when our online loan forgiveness application process is open.
Once we begin accepting forgiveness applications, Royal Credit Union will follow SBA guidance available at the time of submission to determine the amount that is forgivable.
Preparing To Apply?
There are currently three versions of the Paycheck Protection Program (PPP) Loan Forgiveness Applications and Instructions. You’ll need to decide which version to use: the “S” version for loans of $50,000 or less (form 3508S), the “EZ” version (form 3508EZ), or the full application (form 3508). We’ve included brief explanations of how to choose between these form options below.
The S form is the simplest forgiveness form, requiring the fewest calculations and least amount of documentation. Almost anyone with a total PPP loan amount of $50,000 or less can use the S form. (The exception is borrowers and their affiliates who together received combined PPP loans totaling $2 million or more.)
The EZ form is another simplified form option with fewer calculations than the full form. If you do not qualify to use the “S” version, you can use the EZ form if ANY of the following apply to you:
- Is it just you?
- If you don’t have employees, you can use the EZ form.
- Did you retain all employees and pay them at least 75% of their normal pay with no reductions in employee hours?
- If you did not reduce the number of your employees, did not reduce the average paid hours of employees, and did not reduce salary or wages by more than 25% during your covered period, you can use the EZ form.
- Was your business required to shut down or reduce services because of an HHS, CDC, or OSHA requirement related to COVID-19 AND did you pay employees at least 75% of their normal pay?
- If you did not reduce salary or wages by more than 25% during your covered period (regardless of how many hours were actually worked) and your business was not able to operate at pre-COVID levels due to a COVID-related mandate from these specific federal agencies, you can use the EZ form.
PPP Loan Forgiveness Application EZ (form 3508EZ)
Form 3508 (Full Form)
If your business does not qualify to use the above S or EZ options, you’ll need to use the full application (form 3508). The full form requires more calculations and documentation, but can be used for all PPP situations.
Other Ways To Prepare
If you’re getting ready to apply for PPP loan forgiveness, here are some things you can do:
- Consult with your accountant, payroll provider, and/or other professional to assist in preparing your loan forgiveness application. Royal Credit Union is not able to complete or prepare your loan forgiveness application.
- Review the US Treasury CARES website and SBA Paycheck Protection Program webpage for additional information and updates on the PPP Loan Program and Loan Forgiveness Applications. Borrowers have access to the same information that Lenders do.
- Maintain accurate records of how you used PPP loan funds for eligible payroll and nonpayroll expenses. The loan forgiveness application instructions for each form include very specific lists of the documents that each borrower will be required to submit with their loan forgiveness application and retain for their records.
- Keep accurate payroll records, including a record of any changes to full-time employee staffing or reduction of employee compensation.
Ready To Apply?
Like many other financial institutions, we are not currently accepting loan forgiveness applications at this time. While subject to change, we are targeting October to open our online loan forgiveness application process. Here is a step-by-step overview of what to expect once we open up our PPP loan forgiveness application process:
- If you received a PPP loan through Royal Credit Union, you will receive an email from us when our online loan forgiveness application process is available.
- You will request access to Royal’s online loan forgiveness application using the “apply for forgiveness” link that will be available on this webpage once our online application process is available.
- We will confirm that you are eligible to begin a loan forgiveness application with Royal.
- Once your eligibility is confirmed, we will email you links to our online Full Application Form and or online EZ Version.
- You will fill in the required information and upload all necessary documents to complete our online application.
- We review your application and contact you if any revisions need to be made or any documents are missing.
- Once your application is complete, including all required supporting documents, we will submit your application to the SBA for consideration.
- We will contact you with the SBA’s decision and next steps depending on if your loan was fully forgiven, partially forgiven, or denied.
- The content above is intended to be a general summary of the provisions and is from guidance that was available on, or before, April 2, 2020. Please note that the provisions described herein are subject to additional regulation to be promulgated by the U.S. Small Business Administration (SBA) and the U.S. Department of the Treasury. For updated guidance or additional information, please visit the SBA website, the U.S. Treasury CARES website, the U.S. Chamber of Commerce Combatting the Coronavirus website, or the other resource on our Emergency Relief Resources For Business Members page.
- The information contained on this page is subject to change by the US Small Business Administration (SBA).