PPP Loan Forgiveness FAQs and Resources
Paycheck Protection Program (PPP)These step-by-step guides and frequently asked questions can help you prepare for completing your PPP loan forgiveness application.
- Simplified (Form 3508S) Forgiveness Application Resource Guide
- EZ (Form 3508EZ) Forgiveness Application Resource Guide
- Standard (Form 3508) Forgiveness Application Resource Guide
The Schedule A Worksheet can help you calculate information about employees’ hours and wages, which will assist in filling out the application. Instructions for how to use the worksheet are included in the Standard Forgiveness Application (Form3508) Guide.
The U.S. Treasury and the SBA have continually modified the PPP Forgiveness program. We recommend that you continue to watch for updates. You can find detailed information on the SBA and U.S Treasury page websites.
What You Need to Know About PPP Loan Forgiveness
The following loan forgiveness applications are available to apply through the Regions PPP Portal:
- Simplified Form 3508S
- Standard Form 3508
- Form 3508EZ
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If you experience difficulty when applying for forgiveness or have questions, please contact the Regions’ PPP Team at PPPForgiveness@regions.com.
No. Regions has elected not to opt in to the SBA's direct borrower forgiveness process for PPP loans of $150,000 or less. Regions borrowers, regardless of PPP loan amount, should apply through the Regions PPP Portal. The portal is user-friendly and provides step-by-step instructions. It also allows you to save your progress should you want to pause the application and resume later.
The COVID Revenue Reduction Score was developed by an independent third-party SBA contractor based on a variety of inputs, including industry, geography, and business size. It uses current data on economic recovery and return of businesses to operational status to assign a score to each second-draw PPP loan of $150,000 or less. Certain second-draw borrowers who receive a qualifying Score will not be required to upload documentation of revenue reduction as part of their forgiveness application through the Regions PPP Portal, unless requested. These borrowers can complete the streamlined forgiveness application in just a few minutes. As with all forgiveness applications, Regions and the SBA reserve the right to review and request additional supporting documentation.
A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan if the borrower has used loan proceeds for which the borrower is requesting forgiveness. If a borrower is applying for forgiveness of a second-draw PPP loan that is more than $150,000, the borrower must submit the loan forgiveness application for the first-draw PPP loan before or simultaneously with the loan forgiveness application for the second-draw PPP loan.
However, if the borrower does not apply for loan forgiveness within 10 months after the last day of the maximum covered period of 24 weeks, the PPP loan is no longer deferred, and the borrower must begin paying principal and interest. Payments will be based on the remaining portion of your 24- or 60-month term at a 1% interest rate, and the loan must be paid in full by the maturity date stated in your Note. Interest accrues during the deferment period, and the borrower is responsible for paying the accrued interest on any amount of the loan that is not forgiven. PPP loans authorized by SBA before June 5, 2020, have a term of 24 months (two years), but these borrowers have the option of requesting an extension of the term to 60 months (five years).
However, if the borrower does not apply for loan forgiveness within 10 months after the last day of the maximum covered period of 24 weeks, the PPP loan is no longer deferred, and the borrower must begin paying principal and interest. Payments will be based on the remaining portion of your 24- or 60-month term at a 1% interest rate, and the loan must be paid in full by the maturity date stated in your Note. Interest accrues during the deferment period, and the borrower is responsible for paying the accrued interest on any amount of the loan that is not forgiven. PPP loans authorized by SBA before June 5, 2020, have a term of 24 months (two years), but these borrowers have the option of requesting an extension of the term to 60 months (five years).
Eligible borrowers that received a loan of $150,000 or less should use the PPP Loan Forgiveness Application Form 3508S. Forms 3508EZ and 3508S require fewer calculations and less documentation for eligible borrowers than the Standard Form 3508. The Regions 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.
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 covered period begins on the loan disbursement date and ends on any date the borrower chooses that is between eight and 24 weeks after the disbursement date.
The disbursement date is the date the lender disburses the PPP loan. If loan proceeds were received on more than one date, this will be the first date on which the borrower received PPP loan proceeds.
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. Depending on the size of the loan and the forgiveness application used, 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.
The Regions PPP Portal allows you to apply for forgiveness for multiple Regions loans using the same login credentials. Each PPP loan requires a unique forgiveness application. For PPP loans greater than $150,000, you must submit the first draw forgiveness application before or simultaneously with the second draw forgiveness application.
No. Payroll costs that are qualified wages for the Employee Retention Credit are not eligible for loan forgiveness if the employer elects to claim the credit for those amounts. A borrower cannot receive both forgiveness and a tax credit.
Yes. PPP loans cover payroll costs, including family and sick leave. However, borrowers are not eligible to apply for forgiveness of qualified sick leave for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (FFCRA) or qualified family leave for which a credit is allowed under section 7003 of FFCRA. A borrower cannot receive both forgiveness and a tax credit.
You can find up-to-date information on the rules of the program on the SBA PPP site and the U.S. Treasury page.
If you do not apply for loan forgiveness within 10 months after the last day of the maximum covered period of 24 weeks, your PPP loan is no longer deferred, and you must begin paying principal and interest. Payments will be based on the remaining portion of your 24- or 60-month term at a 1% interest rate, and the loan must be paid in full by the maturity date stated in your Note. Interest accrues during the deferment period, and the borrower is responsible for paying the accrued interest on any amount of the loan that is not forgiven. PPP loans authorized by SBA before June 5, 2020, have a term of 24 months (two years), but these borrowers have the option of requesting an extension of the term to 60 months (five years).
Form 3508D pertains to a borrower's disclosure of certain controlling interests. This form has a very limited scope, and if it does not apply to your business, you do not need to complete this form as part of your forgiveness application. This form should only be completed for first draw loans received before December 27, 2020, if a Covered Individual (U.S. government officials including the President, the Vice President, the head of an Executive department as defined in 5 U.S.C. § 101, or a member of Congress) or their spouse has a Controlling Interest (owning, controlling, or holding not less than 20%, by vote or value, of the outstanding amount of any class of equity interest) in a borrower.
What You Need to Know Prior to Applying for Loan Forgiveness
The SBA estimates it will take about 15 minutes to three hours to complete the process depending on the form used. However, actual times may vary widely and could be significantly longer than the SBA's estimate. Filling out the PPP Schedule A Worksheet and gathering supporting documentation will be the most time-consuming. The Regions online application portal is user-friendly and provides step-by-step instructions. It also allows you to save your progress should you want to pause the application and resume later.
Your SBA Loan Number is on the table at the top of the U.S. Small Business Administration Note (SBA Form 147) that was part of your PPP loan package.
The Regions Loan Number is the unique identifier for your PPP loan on the Regions loan system and is used when making loan payments and inquiries. The SBA Loan Number is the unique identifier of your loan on SBA's E-Tran system and is utilized in the PPP forgiveness process.
No. If you are using the 3508EZ or 3508 application and 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 during the applicable period, 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)
- Qualified for the Employee Retention Credit if the employer elects to claim the credit for those amounts
- 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
- Covered worker protection modification expenditures, including but not limited to personal protective equipment
- Covered property damage costs related to property damage and vandalism or looting due to public disturbances in 2020 that were not covered by insurance or other compensation
- Covered supplied costs, which refer to expenditures to suppliers of goods that are essential at the time of purchase to your current operations and made pursuant to an eligible contract order or purchase order
- Covered operations expenditures, which refer to:
- 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.
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.
Business utility payments are payments made for the distribution of electricity, gas, water, transportation, telephone or internet access.
Use the initial date of disbursement as the start date for your covered period.
You can reference the revised SBA Form 3508 Instructions published within the application.
Yes, you can apply for forgiveness up to your maturity date regardless of the status of the loan with SBA.
What You Need to Know After Applying for Loan Forgiveness
If you applied online using the Regions portal, you may log in to check the status of your forgiveness application. Regions will email you periodically throughout the process, as well. Regions, via DocuSign, will email you a final copy of your forgiveness application to execute via electronic signature.
Regions has 60 days to review your application and submit its decision regarding loan forgiveness to the SBA. Regions will send you a DocuSign package for your review and eSignature before submitting the application to the SBA. The SBA will, subject to any review, remit the appropriate forgiveness amount to Regions, plus any interest accrued through the date of payment. Complete and accurate applications will move through the process faster, so please take your time filling out the forgiveness application.
Regions must notify the borrower in writing that we have issued a decision to the SBA denying the loan forgiveness application in full and provide SBA with a copy of the notice. Within 30 days of notice from Regions, the borrower may notify the lender that it is requesting that the SBA review the lender's decision. Regions must also notify the borrower of a final SBA loan review decision, including an SBA loan review decision on forgiveness (whether approving or denying forgiveness in full or part), as well as remittance by SBA to Regions of the loan forgiveness amount, whether partial or full.
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 before the date on which SBA remits the loan forgiveness amount on your loan to Regions or notifies Regions that no loan forgiveness is allowed. In addition, borrowers who file a timely appeal of a final SBA loan review decision will not have to begin making payments of principal or interest on the remaining balance of the PPP loan until the SBA's Office of Hearings and Appeals issues a final decision on the appeal.
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 and maintained by the Economic Aid 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 unforgivable 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
There are Safe Harbor exceptions which may still allow you to receive full forgiveness even if you reduced employees, hours worked or wages. The SBA instructions and the Regions 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, Economic Aid 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. PPP loans with SBA authorization dated on or after June 5, 2020, have a term of 60 months (five years). PPP loans authorized by SBA before June 5, 2020, have a term of 24 months (two years), but these borrowers have the option of requesting an extension of the term to 60 months (five years). Payments of principal, interest and fees are deferred until payment is due per the terms of your Note after the following:
- the SBA remits the loan forgiveness amount to Regions; or
- 10 months after the end of the maximum covered period of 24 weeks, if the borrower has not applied for forgiveness by that time, unless SBA determines that the loan is not eligible for forgiveness (in whole or in part).
Borrowers may request a loan review under certain circumstances within thirty (30) days of notification of the SBA’s initial forgiveness decision.
A borrower's timely appeal of a final SBA loan review decision finding that the loan is not eligible for forgiveness (in whole or in part) extends the deferment period for the PPP loan until the SBA's Office of Hearings and Appeals (OHA) issues a final decision on the appeal. If the borrower appeals a final SBA loan review decision, payments of principal and interest on the remaining balance of the PPP loan will not be due until OHA issues a final decision on the timely appeal. The borrower must notify Regions of the appeal so that Regions can extend the deferment period. Interest accrues during the deferment period, and the borrower is responsible for paying the accrued interest on any amount of the loan that is not forgiven.
A lender may request a guaranty purchase from the SBA when the borrower:
- Is 60 days or more past due on scheduled loan payments and the default has not been cured
- Is permanently closed and does not plan to submit a forgiveness application
- Has filed for Chapter 7 bankruptcy protection
- Has filed for Chapter 11, 12 or 13 bankruptcy once a period of at least 60 days has elapsed from the end of the PPP loan deferment period or any time after an order is entered confirming a plan if the plan does not provide for payment of 100% of the underlying debt
- In the case of self-employed individuals, sole proprietors, single-member LLCs, or independent contracts, the owner is deceased
- The borrower or any owner of 20% or more of the borrower, has been indicted for or convicted of a felony related to the PPP loan
- The borrower has filed an appeal of a final SBA loan review decision with the Office of Hearings and Appeals (OHA) in accordance with PPP Loan Program Requirements. Lender may request guaranty purchase 60 days after the borrower has filed its appeal with OHA.
When Regions requests a guaranty purchase, it is requesting the SBA make it whole for the lended funds. This does not absolve the borrower from the debt still owed to SBA. If a balance is outstanding after a guaranty purchase is executed, Regions will continue to accept payments from the borrower and work with the SBA to apply such funds.
SBA can request a loan review for up to 10 years past the date of your maturity, regardless of loan status .
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