When will the SBA accept loan forgiveness applications? Both will ask you for a series of administrative details, including: ●        Employees at time of loan application, ●        Employees at time of forgiveness application, ●        Economic Injury Disaster Loan (EIDL) advance amount, ●        Economic Injury Disaster Loan (EIDL) application number. Both versions of the PPP loan forgiveness application will want to know your payroll schedule. We hear you and know that you may be eager to submit documents. We are closely tracking the latest guidance from the Small Business Administration (SBA) and are working diligently to digitize the latest SBA Forgiveness Form 3508 in our BlueVine platform. We’ll take…, Unlimited transactions, live support, and no monthly fees, Funding solutions tailored to your business needs, Loved this story? Plus, the final process itself may require less time and/or paperwork on your end. But you need more funds for your business, so without informing your original lender, you apply and get approved for more financing with a different lender. If you use 60% of the loan on payroll costs and the remainder on mortgage interest payments, rent and lease payments, and utilities—this loan is eligible for complete forgiveness. Your salary as reported through a payroll service (max $100,000). Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount. If you do not apply or qualify for PPP loan forgiveness, then you’ll need to repay the loan at 1% interest. Among the top reasons for this: 29 percent run out of cash…, Unlimited transactions, live support, and no monthly fees, Funding solutions tailored to your business needs, Loved this story? There is plenty of time to apply for PPP loan forgiveness. Since our founding in 2013, we’ve been dedicated to helping small businesses improve cash flow to grow their businesses. In fact, about 20 percent of small businesses fail in their first year and about 50 percent don’t make it past five years, according to the Bureau of Labor Statistics. Here’s how they break down: Businesses with employees might be eligible for PPP full loan forgiveness if they: Sole proprietors might be eligible for PPP full loan forgiveness if they: So when does SBA PPP loan forgiveness officially begin? Congress is considering additional changes that would make the forgiveness process even easier for businesses with loans of less than $150,000. You can qualify for up to $10 million or 2.5 times your payroll costs, whichever amount is lower. Some in the accounting industry suggest that whichever period yields a lower FTE number may be the better option, as you will want this number to be as close to the FTE during your covered period as possible. The SBA has currently not provided a way for lenders like BlueVIne to submit completed forgiveness forms. Borrowers who strictly followed the SBA guidelines should not be surprised if their forgiveness amount equals the total of their PPP loan. Initially, this was a $350-billion program providing small businesses with eight weeks of cash-flow assistance through federally guaranteed loans, functioning like a non-taxable grant. Businesses that paid out compensation to owner-employees, self-employed individuals, or general partners will need to reflect these totals in the “Compensation to Owners” section. To calculate your payroll costs as a small business, you’ll need to use the step-by-step, Your 2019 net profit (max $100,000) as reported on your Schedule C (line 31). Chiefly, the program offers forgiveness for businesses with employees so long as they re-hired (or did not lay off) staff, only reduced salaries by 25 percent for employees making less than a $100,000 annualized salary, and used 60 percent of the total funds towards paying employees and staff. The long form application includes an additional page, called Schedule A, which includes several entry fields to help you determine total payroll costs and how they factor into the details you’ll provide in the “Adjustments for Full-Time Equivalency and Salary/Hourly Wage Reductions” section of the forgiveness form. In April, the Paycheck Protection Program and Health Care Enhancement Act added $310 billion to the program. Therefore, there is no payroll information required—nor calculations regarding payroll required by way of the PPP loan forgiveness long-form application. 2020 Bluevine Capital Inc. All Rights Reserved | BlueVine’s Flex Line of Credit and Term Loan is issued by Celtic Bank, a Utah-chartered Industrial Bank, Member FDIC. The EZ form is more straightforward than the long form, as the name suggests. Here’s why you should look at a high-interest checking…, Unlimited transactions, live support, and no monthly fees, Funding solutions tailored to your business needs, Loved this story? For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis. The best way to prepare for PPP loan forgiveness is to track your expenses. Read up on how the program works here. Bluevine does not handle the repayment of your PPP loan. More on that in our next section. Although it may be beneficial to wait until further legislation is passed, applying for forgiveness is one of many smart business decisions to make as we ride out a turbulent economic period for entrepreneurs and business owners across the country. To calculate your PPP loan, you’ll need to consider the average monthly cost of employee salaries, including your own. The repayment period itself depends on when you received your loan. The PPP loan forgiveness program offers borrowers with a unique opportunity to have some—or all—of their loan forgiven, so long as they meet certain criteria. The major difference comes down to calculating wages and payroll: self-employed PPP recipients do not have employees other than themselves or their business partner(s), depending on their business entity. Your repayment period will begin 10 months after the end of your covered period, unless you apply for forgiveness before then. This version asks you to calculate how you used loan proceeds to pay for approved uses. Learn More. Although both versions of the PPP loan forgiveness application are relatively straightforward, they both require borrowers to compile documentation about how they used the funds. If you have a PPP loan, you’ll have up to 10 months from the end of your covered period to until your payments start. You can also list out any payment of state and local taxes as based on employee compensation here as well. Some borrowers may want to go with the eight-week covered period if they used funds to rehire or replace staff—especially if they have encountered financial difficulties with keeping this staff employed during the longer 24-week period.

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