SBA PPP Loan Forgiveness Application Process
*The Paycheck Protection Program (PPP) ended on May 31, 2021.
Loan Forgiveness Application and Process
To begin the PPP application process, please do the following:
- Read “STEP 1 – PREPARATION” instructions shown below.
- Navigate to the online portal using the following link:
CLICK HERE TO BEGIN A FORGIVENESS APPLICATION
- Log into your account by entering the requested identifying information
- Choose the “Start Request” link (on the PPP Loan Forgiveness button).
- The site will direct you towards the appropriate application for your PPP loan.
- For loans over $150,000, the user will have a choice between application types
- The site provides details on how to choose the correct application type for your loan
- Enter all required information, and submit the application. Supporting documents can be uploaded on the next page.
Please note: Virginia National Bank is now accepting loan forgiveness applications for “1st and 2nd Draw Loans.” Additionally, only those businesses who received a PPP Loan from Virginia National Bank are eligible to apply for Loan Forgiveness with VNB. If your PPP loan was approved and funded by another financial institution, you must submit your Loan Forgiveness Application with that institution.
Below is a summary of the PPP Loan Forgiveness guidelines. We have also provided information on supporting documentation you may be required to provide.
STEP 1 – PREPARATION
- Covered Period:
- To qualify for loan forgiveness, your loan funds must be used for eligible costs either incurred or paid during your covered period. Your covered period begins on your “Disbursement Date,” and ends no sooner than 8 weeks (56 days) and no later than 24 weeks (168 days) from the date of disbursement.
- You do not need to opt-in or otherwise notify us in advance of your choice of covered period terms.
- Payroll costs that are incurred during your covered period, but paid out after the end of your covered period are still eligible to be included within the forgiveness calculation if those payments occurred on or before the next regularly scheduled payroll date (please note that “incurred” means the date the pay was earned).
- Allowable PPP expenses include:
- Payroll Expenses:
- Spend at least 60% of the funds on eligible payroll expenses in order to receive the full amount of forgiveness. You may spend more, but spending less will decrease your forgiveness amount.
- Include only payroll costs for employees whose principal place of residence is in the United States. Do not include payroll costs for independent contractors (1099-employees should apply for forgiveness separately with their PPP lender).
- Your forgiveness amount may be subject to the SBA’s FTE Reduction Rules.
- Non-Payroll Expenses:
- Use the remainder of the funds on other eligible covered business expenses (business mortgage interest or rent or lease payments if your agreement was in place before 02/15/2020, and eligible business utility payments if your service began before 02/15/2020).
- These costs may not exceed 40% of your total forgiveness amount.
- Payroll Expenses:
- Ensure that you have all the necessary required supporting documents that will need to be submitted in addition to your PPP Loan Forgiveness Application.
STEP 2 – APPLY
Please use the link at the top of this page to navigate to the online forgiveness application portal and follow the steps outlined above.
Some important notes:
- You will complete either the Form 3508 Loan Forgiveness Application, the Form 3508EZ Loan Forgiveness Application, OR the Form 3508S, depending upon your circumstances.
- More information on SBA PPP loan forgiveness eligibility and criteria can be found on the SBA or U.S. Department of Treasury website.
- Please wait to submit your PPP Loan Forgiveness Application until you have collected all required documents.
- Loan payments are automatically deferred until your forgiveness amount is received by us from the SBA or, if you do not apply for forgiveness, 10 months after the expiration of your elected covered period (either 8 weeks or 24 weeks beginning on your disbursement date).
- Correspondence will come from firstname.lastname@example.org (please be sure to check your spam folder or white list the email address with your email provider). You may receive additional emails from Bank personnel who are reviewing your Loan Forgiveness Application requesting to speak with you, or to validate information or documentation you provided.
STEP 3 - CONFIRMATION & APPROVAL TIMING
- After you’ve submitted your PPP Loan Forgiveness Application, our team at VNB will conduct an internal review of your application and all provided supporting documentation. If there are any needed revisions to your application or if we might need additional supporting documentation, we will contact you prior to us submitting your forgiveness package to the SBA.
- Once your application has been reviewed, an approval decision will be made by us (within 60 days of receipt of your completed Application). Your application and our decision will then be submitted to the SBA for their final eligibility decision.
- The SBA may take up to 90 days from our submission to issue their eligibility decision. We will notify you of remittance by the SBA of your loan forgiveness amount (or that the SBA determined that a lesser or no amount is eligible for forgiveness).
- If your loan is not completely forgiven, you will receive a statement with the amount and date of your first payment for the unforgiven portion. Your PPP loan will operate just like a traditional term loan with monthly payments paid to Virginia National Bank.
The information above is based on the Bank’s interpretation of laws, rules, regulations, and guidance provided by the SBA and U.S. Department of Treasury regarding the Paycheck Protection Program at the time this page was authored. While the information provided is intended to be accurate it should not be considered and is NOT INTENDED TO BE FINANCIAL OR LEGAL ADVICE. This page and its content may be updated periodically if there are changes to the Program. However, the Program is rapidly evolving and the Bank cannot be held responsible for any errors or omissions as a result of this. Please consult the SBA’s and U.S. Treasury’s websites for updated information. In the event of any discrepancies between the information on this site and the SBA’s or U.S. Treasury’s site, please follow official SBA or U.S. Treasury guidance.
REQUIRED SUPPORTING DOCUMENTATION
Your Loan Forgiveness Application will not be considered complete without all applicable supporting documentation, which may slow your forgiveness process. In the event of any discrepancies between the information on this site and the SBA’s site, please follow official SBA guidance. Please also see the SBA’s Loan Forgiveness Application Instructions for additional details.
PLEASE NOTE: NO SUPPORTING DOCUMENTATION FOR FORGIVENESS IS REQUIRED TO BE SUBMITTED TO VNB IF THE BORROWER IS USING FORM 3508S.
However, all borrowers are required to have the supporting documentation on file and ready to be submitted in the event the SBA performs a review (audit). Please note that any required documentation that was not submitted at loan origination will be required at the time you apply for forgiveness.
The following is a list of supporting documentation you must submit, as applicable, with your PPP Loan Forgiveness Application:
Documents verifying the eligible cash compensation and non-cash benefit payments from your covered period.
1. Cash Compensation:
- Payroll report from third-party payroll service provider (such as Paychex, BenefitMall, ADP, etc.) documenting the amount of cash compensation paid to employees. In addition to the third-party payroll, please provide payroll tax forms (such as Form-941), plus state quarterly wage reporting and unemployment insurance filings for the quarter(s) in which the covered period falls.
- Or, all of the following:
- Payroll tax forms (such as Form 941), plus state quarterly wage reporting and unemployment insurance filing
- Proof of payments of both payroll and tax filings (e.g., bank statements or cancelled checks)
- Self-prepared payroll report or schedule
Notes on Payroll Reports:
- Payroll Reports should include all periods overlapping the elected covered period, and show figures for each of the following eligible costs:
- Cash compensation
- Employer contributions for employee health insurance
- Employer contributions to employee retirement plans
- Employer state and local taxes assessed on employee compensation (e.g., SUI - state unemployment insurance tax)
- Payroll reports should also show separate cash compensation figures for:
- Employees who received compensation at an annualized rate less than or equal to $100,000 for all pay periods during your selected referral period; and
- Employees who received compensation at an annualized rate greater than $100,000 for all pay periods during your selected referral period (for Form 3508EZ, there is no need to separate employees by selected referral period compensation level).
Notes on Cash Compensation
- Eligible cash compensation includes: gross salary, gross wages, gross tips, gross commissions, paid leave (vacation, family, medical or sick leave), and allowances for dismissal or separation. This may include bonus; hazard pay; and salaries to furloughed employees.
- Do not include compensation in excess of an annual salary of $100,000 annualized, as prorated for the covered period. Therefore, the payroll schedule should show no employee with more than $46,154 in compensation if selecting the 24-week period (or $15,385 for the 8-week period, if eligible and selected).
- Do not include payments to independent contractors, or compensation to employees whose principal place of residence is outside the US; or qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act.
2. Non-cash Benefit Payments:
- Account statements or payment receipts from insurance or plan administrator verifying eligible payments or proof of payments made by the employer.
FULL-TIME EQUIVALENCY (FTE)
Documents showing average Full-Time Equivalency
Average full-time equivalency (FTE) - Form 3508
- FTE report showing average number of FTE during one of these periods:
- February 15, 2019 to June 30, 2019
- January 1, 2020 to February 29, 2020
- If you are a seasonal employer, select a period above or any consecutive 12-week period May 1, 2019 and September 15, 2019
- FTE report showing average number of FTE employees on January 1, 2020 and at the end of covered period selected
Notes on Full-Time Equivalency (FTE):
FTE counts both full-time (FT) and part-time (PT) employees. An FT employee is counted as 1.0 FTE, and a PT employee is counted by average number of hours per week divided by 40. For example, a PT employee working 32 hours would count as 0.8 FTE. SBA also offers a simplified method that assigns all PT employees as 0.5, if that is preferable.
NON-PAYROLL ALLOWABLE EXPENSES AND REQUIRED DOCUMENTATION
1. Documentation verifying the existence of the obligations/services prior to February 15, 2020, and eligible payments for the Covered Period
- Business Mortgage Interest payments: Lender Amortization Schedules and receipts or cancelled checks verifying payments; or Lender account statements from February 2020 through one month after the end of your covered period verifying interest amounts and payments;
- Business Rent or Lease payments: Copies of lease agreement and receipts or cancelled checks verifying payments; or Lessor account statements from February 2020 through one month after the end of your covered period verifying payments;
- Business utility payments: Copies of invoices from February 2020, and those paid during your covered period and receipts, cancelled checks, or account statements verifying payments.
- Covered Operations Expenditures: payments for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses;
- Covered Property Damage: costs related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation
- Covered Supplier Costs: expenditures made by a borrower to a supplier of goods for the supply of goods that—(A) are essential to the operations of the borrower at the time at which the expenditure is made; and (B) is made pursuant to a contract, order, or purchase order—(i) in effect at any time before the covered period with respect to the applicable covered loan; or (ii) with respect to perishable goods, in effect before or at any time during the covered period with respect to the applicable covered loan
- Covered Worker Protection Expenditures: (A) operating or a capital expenditures to facilitate the adaptation of the business activities of an entity to comply with requirements established or guidance issued by the Department of Health and Human Services, the Centers for Disease Control, or the Occupational Safety and Health Administration, or any equivalent requirements established or guidance issued by a State or local government, during the period beginning on March 1, 2020 and ending the date on which the national emergency with respect to the COVID–19 expires related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID–19; (B) such expenditures may include—(i) the purchase, maintenance, or renovation of assets that create or expand—(I) a drive-through window facility; (II) an indoor, outdoor, or combined air or air pressure ventilation or filtration system; (III) a physical barrier such as a sneeze guard; (IV) an expansion of 51 additional indoor, outdoor, or combined business space; (V) an onsite or offsite health screening capability; or (VI) other assets relating to the compliance with the requirements or guidance described in subparagraph (A), as determined by the Administrator in consultation with the Secretary of Health and Human Services and the Secretary of Labor; and (ii) the purchase of—(I) covered materials described in section 328.103(a) of title 44, Code of Federal Regulations, or any successor regulation; (II) particulate filtering facepiece respirators approved by the National Institute for Occupational Safety and Health, including those approved only for emergency use authorization; or (III) other kinds of personal protective equipment, as determined by the Administrator in consultation with the Secretary of Health and Human Services and the Secretary of Labor; and (C) such expenditures do not include residential real property or intangible property
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