Paycheck Protection Program Loan Forgiveness Information

Thank you for choosing Bank of Utah to process and service your Paycheck Protection Program (PPP) loan. We are pleased to be able to assist you and our community during this difficult time. We will be frequently updating this page, as information becomes available, to help you prepare to apply for PPP Loan Forgiveness.

As the PPP program evolves into the forgiveness phase of the process, changes to the guidelines and requirements are expected.

The SBA is now accepting forgiveness applications. However, Congress is debating several bills that would offer additional relief and simplify the forgiveness process.

The decision of when to apply for forgiveness is up to you. It may be beneficial to wait for a decision on new legislation. You have until 10 months after the last day of the covered period of your loan to apply.

We will continue to provide additional information as it becomes available.

Updates Applications and Instructions Required Documents FAQs Common Missteps

Updates

On October 8, 2020, the SBA released a streamlined loan forgiveness application for PPP loans of $50,000 or less. The new Form 3508S is a simplified forgiveness application in which the borrower certifies they have followed the requirements of the PPP program. SBA Form 3508S requires fewer calculations and less documentation for eligible borrowers. Borrowers that use this form are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages. The form also does not require borrowers to show the calculations used to determine their loan forgiveness amount. However, SBA may request information and documents to review those calculations as part of its loan review process. Bank of Utah is in the process of creating an updated DocuSign version of Form 3508S. We plan to email this to our qualifying borrowers during the week of October 19.

On June 5, 2020 a new law was enacted to address concerns surrounding the original PPP program. The Paycheck Protection Program Flexibility Act (PPPFA) addresses the following points:

  1. PPPFA changes amount of loan needed for payroll to 60%. This increases the amount of funds available for other expenses, such as rent, mortgage payments, utilities, and interest on loans from 25% to 40%.

  2. PPPFA extends time period to use funds from 8 to 24 weeks. While businesses will still need to spend the money on payroll and authorized expenses, you now have until the end of 2020 to do so. Borrowers that received a PPP loan before June 5, 2020 can elect to use an eight-week covered period if preferred.

  3. PPPFA pushes back a June 30 deadline to rehire workers to December 31, 2020 and eases rehire requirements. The payroll calculation used in the loan application still applies to the forgivable amount, however you now have until December 31, 2020 to rehire workers in order for their salaries to count towards forgiveness. Additionally, it adds exceptions for a reduced headcount if you are able to demonstrate an inability to return to the same level of business activity or demonstrate an inability to hire similarly qualified employees on or before December 31, 2020.

  4. For loan applications processed after June 5, 2020, the PPPFA extends the repayment term from 2 years to 5. In the event that the loan or a portion of the loan is not forgiven, you now have five years at the 1% interest rate to repay the loan. For loan applications prior to June 5, 2020, the borrower and lender must mutually agree to any term extension.

The final ruling has been posted on the U.S. Department of the Treasury web site. You can read it in its entirety here: https://home.treasury.gov/system/files/136/PPP-IFR-Revisions-to-First-Interim-Final-Rule.pdf Additional revisions to this ruling are expected.

Loan Forgiveness Applications

(published October 8, 2020)
The SBA and Treasury Department released a streamlined loan forgiveness application for PPP loans of $50,000 or less.
Download Form 3508S
Download the instructions for Form 3508S

(published June 20, 2020)
The SBA updated the Paycheck Protection Program Loan Forgiveness Application to streamline the forgiveness application process for certain borrowers. The “EZ” Paycheck Protection Program loan forgiveness application is a 3-page form requiring less documentation and fewer calculations than previously required. Form 3508EZ applies to borrowers who meet any one of these three criteria:

  • Applied for the PPP loan as self-employed, an independent contractor or a sole proprietor with no employees.
  • Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
  • Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.

Download Form 3508EZ
Download the instructions for Form 3508EZ

SBA also updated the regular Form 3508 to reflect recent changes made by Congress in the PPP Flexibility Act
Download the revised Form 3508
Download the instructions for Form 3508

SBA's FAQs updated August 11, 2020. This document includes sections addressing general questions on loan forgiveness, questions related to forgiveness of payroll and non-payroll costs and questions on forgiveness reductions.

Required Documents

In addition to the completed forgiveness application, you will need to provide the following additional documentation. You will be able to upload these documents through the electronic application we will be sending to you. A handy document checklist can be downloaded here.

Required Payroll Documents: 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.
  • Tax forms 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, 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 on page 1 of the Form 3508EZ instructions, 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.

Required Non-payroll Documents (if applicable) : 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.

Full-time Equivalent (FTE) Documents (if applicable) :
Note: If you qualify for the 3508EZ application, you may not need to gather the FTE documents.

For the full 3508 application, you'll need to provide documents showing your average number of FTE employees on payroll.
These include:

  • 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.
  • If you were unable to return to the previous FTE levels, be prepared to maintain documentation related to any permitted “safe harbor” FTE reduction situations.

Organize all the documents you gather and keep them in a safe place; the SBA requires you to retain them for six years after your loan is fully forgiven and/or repaid, and to have them available for review in the future if requested.

Frequently Asked Questions

SBA's FAQs updated August 11, 2020. This document includes sections addressing general questions on loan forgiveness, questions related to forgiveness of payroll and non-payroll costs and questions on forgiveness reductions.

  1. When can you apply for PPP loan forgiveness?
    You may apply for forgiveness at any time after you have used all of the loan proceeds but no later than 10 months after the last day of the covered period. The SBA may make changes to the current application rules. You may find it best to wait to apply, as future changes may impact your application.

  2. What is the process for applying for PPP loan forgiveness?
    Bank of Utah will send you a secure DocuSign loan forgiveness application Form 3508EZ. We will notify you by email when it is ready. In the meantime, use the forms and instruction sheet links above to begin to prepare the information you will be needing. Bank of Utah will only accept applications securely submitted through DocuSign or delivered and signed in person. In addition to filling out the application, you’ll need to provide documents to substantiate how your loan proceeds were used by your business. Documents you will need to submit include payroll documents and, if applicable, non-payroll documents and full-time equivalent (FTE) documents (see Required Documents ). You will be able to upload these documents through your DocuSign form. If you've reduced wages or hours of any employee or reduced employee headcount by more than 25 percent during the covered period and are unable to use the Form 3508EZ, you will need to use the standard SBA Form 3508.

  3. What is the timeline for review?
    Once your application has been submitted and the bank has determined the application is complete, Bank of Utah will have 60 days to submit the application to the SBA. Full loan forgiveness is not guaranteed and is subject to review by the bank and the SBA. After the SBA receives the submitted application, they will then have 90 days to conduct a review. They can either approve the forgiveness, ask for more information, or approve a portion of the loan for forgiveness. If the SBA does not approve all or part of the loan for forgiveness, borrowers will have two to five years (depending on the PPP loan funding date) to repay the loan at 1% interest. If a borrower received the loan prior to June 5, 2020, they have to negotiate the five-year term with Bank of Utah.

  4. What is my SBA PPP Loan Number?
    Your SBA PPP Loan Number is the same as the Lender PPP Loan Number. This number will be provided to you in your electronic forgiveness form we will be sending you when the submission process begins.

  5. What if I received an Economic Injury Disaster Loan (EIDL)?
    If you received an Economic Injury Disaster Loan (EIDL) loan, please make sure to enter the EIDL advance amount and EIDL application number on your 3508 or 3508EZ forgiveness application. Also note that EIDL advance proceeds will be deducted from your PPP forgiveness amount. For example, if you received a $10,000 EIDL advance and have a $100,000 PPP loan in which you qualify for 100% forgiveness, then your net forgiveness amount will be $90,000. You will be required to pay off the $10,000 EIDL advance over the term of your PPP loan.

As this program continues to evolve to address growing needs from our business community, we expect more revisions to come. Good record keeping and tracking the ever-changing regulations are critical. We encourage you to check our PPP loan information page regularly for updates as they are made available. Additionally, we have set up a team to review your application. You can contact them by email at ppp-forgiveness@bankofutah.com. They can help with general application questions. For other questions, we recommend that you consult with your tax advisor, legal counsel, or a bookkeeping service to assist your business if necessary.

Common Missteps

Missing or Incorrect Documentation: Be sure to review the list of Required Documentation. Failure to include these supporting documents will delay your submission process and incorrect information may result in reduction of your forgiveness amount.

Incorrect Start Date: The covered period start date must be the same date as the disbursement date.

Miscalculation of Payroll Costs: Payroll costs must be based on gross pay, not net pay. Additionally, gross wages during the covered period cannot exceed a prorated amount of $100,000.00 for any employee. Wages in excess of $100.000.00, on a prorated basis, cannot be included in the payroll costs.

It is very important that you read all the instructions that accompany the SBA's forms.



As your local community bank, Bank of Utah is committed to supporting our customers, communities and employees for more than 67 years. We’re here to do all we can to help those adversely impacted by this pandemic.