Skip to main content
  • Contact Us
  • Locations
  • About Us
  • Careers
PPP FAQS
PPP FAQS

Paycheck Protection Program FAQs

What You Need to Know About PPP Loan Forgiveness

ANB Bank has developed an online portal for loan forgiveness applications. When you are eligible to apply, you will receive an email from your Lender containing a link to our secure portal to complete your application.

A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan—including before the end of the covered period—if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness. However, if the borrower does not apply for loan forgiveness within 10 months after the last day of the covered period, the PPP loan is no longer deferred, and the borrower must begin paying principal and interest monthly.

For PPP Loan amounts of $50,000 or less, the SBA has developed a streamlined PPP Loan Forgiveness Application Form 3508S through the ANB Bank online portal. This Form does not require borrowers to show the calculations used to determine their loan forgiveness amount. Eligible borrowers can use the PPP Loan Forgiveness Application Form 3508S through the ANB Bank online portal.

For PPP Loan amounts greater than $50,000, eligible borrowers can use the PPP Loan Forgiveness Application Form 3508EZ through the ANB Bank online portal. Form 3508EZ requires fewer calculations and less documentation for eligible borrowers than the full PPP Loan Forgiveness Application Form 3508. ANB Bank’s online application will guide borrowers through completing the required forms. Use the Checklist for Using SBA Form 3508EZ to determine if you are eligible to use the EZ form.

Borrowers who can document that 100% of their PPP loan amount for which they seek forgiveness was spent on eligible payroll costs do not need to detail or otherwise provide documentation of nonpayroll costs. However, these borrowers have the option to detail and provide documentation of nonpayroll costs if they so choose.

For additional information regarding which loan application to use, please see question 1 under “What You Need to Know Prior to Applying for Loan Forgiveness” below.

The loan forgiveness “covered period” is the period the borrower has to incur and/or pay payroll and nonpayroll costs to be eligible for forgiveness. The PPP Flexibility Act extended the covered period from 8 weeks to 24 weeks from the date of disbursement of your PPP loan, but in no event ending later than December 31, 2020. Eligible borrowers with PPP loans that were funded prior to June 5, 2020, however, may elect to use the original 8-week covered period.

For purposes of seeking forgiveness for payroll costs, borrowers may elect in certain instances to use an "alternative payroll covered period" which is measured from the first day of the first payroll cycle in the covered period rather than the date of disbursement of the borrower’s PPP loan.

Yes. You may submit a loan forgiveness application before the end of the covered period if you have used all of the loan proceeds for which you are requesting forgiveness. For example, if you are using a 24-week covered period but have spent all loan proceeds on eligible purposes within 16 weeks (with at least 60% spent on eligible payroll costs and not more than 40% spent on eligible nonpayroll costs), you may submit a loan forgiveness application.

Borrowers with a biweekly (or more frequent) payroll schedule may elect to calculate eligible payroll costs by measuring the 24-week (168-day) period or, at the election of the borrower for loans received before June 5, 2020, the 8-week (56-day) period, beginning with the first date of the first payroll period following the PPP loan disbursement.

Note: The alternative payroll covered period applies only to payroll costs, not to nonpayroll costs. The Covered Period always starts on the date the lender makes a disbursement of the PPP loan. Nonpayroll costs must be paid or incurred during the Covered Period to be eligible for loan forgiveness.

The disbursement date is the date PPP funds were received from ANB Bank by the borrower.

If a borrower pays twice a month or less frequently, it will need to calculate payroll costs for partial pay periods. However, borrowers with a biweekly or more frequent (e.g., weekly) payroll schedule may elect to use the alternative payroll covered period in order to avoid the need to calculate payroll costs for partial pay periods.

FTE is a unit of measure for PPP forgiveness in which an employee who works on average at least 40 hours per week is equal to 1.0 FTE. Any employees working less than 40 hours per week are calculated at a proportionally lower FTE level. This calculation will be used to determine whether the Borrower’s loan forgiveness amount must be reduced due to a statutory requirement concerning reductions in full-time equivalent employees.

You can find up-to-date information on the rules of the program on the SBA's website.

If you do not apply for loan forgiveness within 10 months after the last day of the covered period, your PPP loan is no longer deferred, and you must begin paying principal and interest monthly.

Payments will be based on the remaining portion of your 24- or 60-month term at a 1% interest rate.

What You Need to Know Prior to Applying for Loan Forgiveness

Currently there are three methods of determining the amount of loan forgiveness that you are eligible for:

  1. Application Form 3508S for loan amounts of $50,000 or less. This is a streamlined form that requires fewer calculations and less documentation for eligible borrowers. Borrowers that use SBA Form 3508S are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages. SBA Form 3508S also does not require borrowers to show the calculations used to determine their loan forgiveness amount.
  2. Application Form 3508EZ for loans over $50,000 that provides more streamlined calculations for borrowers that meet certain criteria. (see below)
  3. Application Form 3508 for all other loans (Standard Long Form).

ANB Bank’s online application will guide borrowers through completing the required forms. Use the Checklist for Using SBA Form 3508EZ to determine if you are eligible to use the EZ form. In summary, you’ll have to meet at least one of the following three criteria in order to be eligible to use the 3508EZ form:

  1. You are a self-employed individual, an independent contractor, or a sole proprietor who had no employees at the time you applied for a PPP loan
  2. You didn’t reduce salary or wages of employees making under $100K/year by more than 25% and you didn’t cut any FTE employees (other than employees you were unable to rehire and unable to replace with similarly-qualified employees)
  3. You didn’t reduce the pay of employees making under $100K/year by more than 25% and you were unable to operate at the same level as you had on February 15, 2020, because of COVID-19 health and safety restrictions imposed by federal agencies.

Please note you can use still use the 3508 EZ application if you had a reduction of employees due to employees voluntarily resigning or being terminated for cause as long as you otherwise meet one of the criteria above.

This is not necessary. ANB Bank has created an online application using the SBA criteria to help you fill out the application and upload your supporting documentation. If you do fill out the forgiveness application form from the SBA’s website, you can use it to assist you in applying through the ANB Bank online application.

In addition to your loan documents, you will need documentation of payroll costs verifying the eligible cash compensation and the non-cash benefit payments from the covered period or the alternative payroll covered period, as well as documentation of nonpayroll costs verifying existence of the obligations/services prior to February 15, 2020, and eligible payments from the covered period. In addition, borrowers using Form 3508 may elect to provide documentation of full-time equivalency (FTE). This supporting documentation must be available in electronic format, so that you can attach it to the online forgiveness application. You will only be required to provide documentation verifying those costs for which you are seeking forgiveness. For example, if you are only seeking forgiveness of payroll costs, you are not required to provide documentation of nonpayroll costs (though you may elect to do so if you choose).

Common supporting documentation:

Payroll

  • 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)
  • State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported
  • 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

Nonpayroll

  • 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 canceled 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, canceled checks, or account statements verifying those eligible payments

Full Time Equivalency (FTE)

  • Documentation showing the average number of FTE employees on payroll per week employed by the borrower between February 15, 2019 and June 30, 2019
  • Documentation showing the average number of FTE employees on payroll per week employed by the Borrower between January 1, 2020 and February 29, 2020
  • In the case of a seasonal employer, documentation showing the average number of FTE employees on payroll per week employed by the borrower between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive 12-week period between May 1, 2019 and September 15, 2019

PPP Schedule A Worksheet if not using the EZ application (Form 3508EZ) or Form 3508S.

Determine which forgiveness form you will use by reviewing the Checklist for Using SBA Form 3508EZ. Familiarize yourself with the forms, and gather the required documentation specified in the instructions. Please note, for loans in the amount of $50,000 or less you will use Forgiveness Form 3508S.

PPP Loan Forgiveness Form 3508S
PPP Loan Forgiveness Form 3508S Instructions
PPP EZ Loan Forgiveness Application Form 3508EZ
SBA PPP EZ Loan Forgiveness Application Instructions
PPP Loan Forgiveness Application Form 3508
SBA PPP Loan Forgiveness Application Instructions

Yes. There is no prepayment penalty.

What You Need to Know About the Loan Forgiveness Application

  • SBA Loan Number – Found in the “Account No.’” box on your PPP Promissory note
  • ANB Bank Loan – Found in the “Loan No.” box on your PPP Promissory note
  • Note Date – Found in the “Loan Date” box on your PPP Promissory note

No. If you are able to upload documentation with your application for forgiveness verifying that 100% of the PPP loan amount for which you seek forgiveness was spent on eligible payroll costs, it is not necessary to detail or otherwise provide documentation of nonpayroll costs. However, you have the option to detail and provide documentation of nonpayroll costs if you so choose.

Payroll costs include gross 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 healthcare coverage (including insurance premiums) and retirement
  • Payment of state and local taxes assessed on compensation of employees
  • For an independent contractor or sole proprietor, wages, commissions, income, or net earnings from self-employment, or similar compensation

The following is expressly excluded from the definition of payroll costs:

  • Any compensation of an employee whose principal place of residence is outside of the United States
  • Compensation of an individual employee in excess of an annual salary of $100,000, prorated as necessary
  • Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee's and employer's share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees
  • Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Pub. L. 116–127)

See payroll costs questions 5, 6, 7, and 8 starting on page 3 of the SBA's Frequently Asked Questions (FAQs) on PPP Loan Forgiveness for detail regarding incentive pay (including lost tips, lost commissions, or bonuses), eligible employer expenses for group health care benefits, employee retirement, and owner compensation.

  • Interest payments on any business mortgage obligation on real or personal property incurred before February 15, 2020 (but not any prepayment or payment of principal)
  • Rent payments on business rent obligations on real or personal property under a lease agreement in force before February 15, 2020
  • Business utility payments for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020

See payroll costs questions 5, 6, and 7 starting on page 7 of the SBA's Frequently Asked Questions (FAQs) on PPP Loan Forgiveness for detail regarding payments made on leases renewed or mortgage loans refinanced on or after February 15, 2020, covered utility payments, and electricity supply charges.

Yes, if the costs are paid on or before the next regular payroll date (for payroll costs) or billing date (for nonpayroll costs) after the Covered Period or Alternative Payroll Covered Period.

Yes.

Business utility payments are payments made for the distribution of electricity, gas, water, transportation, telephone, or internet access.

If you received an Economic Injury Disaster Loan Advance from the SBA, you will include this information in the appropriate fields. The SBA is required to reduce the loan forgiveness amount by the amount of the EIDL Advance.  In the event the PPP loan is not forgiven in full, ANB Bank will provide notification of the date on which the Borrower’s first loan payment is due. 

SBA’s Economic Injury Disaster Loan (EIDL) Advance provided emergency economic relief to American small businesses, non-profits, and agricultural enterprises facing economic disruption due to the COVID-19 impact. This is a separate program from PPP loans with ANB Bank. 

You can reference the revised SBA Form 3508 Instructions. ANB Bank’s online portal will also provide detailed instructions to help complete form 3508.

What You Need to Know After Applying for Loan Forgiveness

ANB Bank has 60 days to review your application and submit its decision regarding loan forgiveness to the SBA. ANB Bank will email you at the end of the review process, before submitting to the SBA. The SBA will, subject to any review, remit the appropriate forgiveness amount to ANB Bank, plus any interest accrued through the date of payment, no later than 90 days after ANB Bank submits the application to the SBA. It could take up to 150 days (approximately five months) from the date you submit your application. Complete and accurate applications will move through the process faster, so please take your time filling out the forgiveness application.

No, PPP borrowers who have submitted applications for forgiveness within 10 months after the last day of the covered period will not have any principal or interest payments due until the forgiveness amount is remitted to ANB Bank, unless SBA determines that the loan is not eligible for forgiveness (in whole or in part). If this occurs, ANB Bank will notify the borrower of the date the first payment is due.

Yes. The amount of loan forgiveness can be as much as the full principal amount of the loan and any accrued interest only if the loan proceeds were used for forgivable purposes and employee and compensation levels were maintained. The CARES Act, as amended by the PPP Flexibility Act, specifically requires certain reductions in a borrower's loan forgiveness amount. Several factors which might reduce your loan forgiveness include:

  • Use of loan proceeds for non-forgivable purposes
  • Nonpayroll costs which exceed 40% of the total forgiveness amount
  • Reductions in hourly wages or salaries of employees by more than 25%
  • Reductions in the number of employees or the hours your employees worked
  • EIDL Advance

There are Safe Harbor exceptions which may still allow you to receive full forgiveness even if you reduced employees, hours worked, wages or salaries. The SBA instructions and the ANB Bank online application will help guide you through the Safe Harbor calculations. Additional information about reasons for reductions in loan forgiveness amount can be found in the CARES Act, PPP Flexibility Act, and the SBA's various interim final rules.

Any PPP loan balance remaining will be amortized over the term of your loan at 1% interest as outlined in your note, payable monthly. PPP loans with SBA authorization dated on or after June 5, 2020 have a term of 60 months (five years). If before June 5, your loan has a term of 24 months (two years), but you have the option of requesting an extension of the term to 60 months (5 years) during the forgiveness application process. Payments of principal, interest and fees are deferred to (1) the date the SBA remits the borrower’s loan forgiveness amount to ANB Bank or (2) ten months after the end of the covered period if the borrower has not applied for forgiveness at that time, unless SBA determines that the loan is not eligible for forgiveness (in whole or in part).


Disclosure

ANB Bank makes no representations or warranties of any kind, express or implied, with respect to the nature, accuracy or otherwise of the information provided on this webpage or with respect to the suitably of the information to your particular circumstances. All content on this webpage is for information purposes only and is not intended to be a substitute for legal or other advice. You should seek legal and any other counsel you deem appropriate and refer to the SBA website for any informational regarding the Paycheck Protection Program.