SBA PPP loans are designed to provide small businesses with funds to help keep employees on their payrolls. For more information on how PPP loans work, check out our guide. All or a portion of each Paycheck Protection Program loan is eligible for loan forgiveness, as long as the business meets certain criteria. Keep reading to learn more about what documents you should have on hand to apply for PPP loan forgiveness.

As a reminder, only PPP loan funds used for payroll costs, operation expenses, supplier costs, worker protection expenses, covered property damage costs, rent, covered utilities, and interest on a mortgage (no prepayments) are eligible for forgiveness. And, at least 60% of total PPP loan funds must be used for payroll costs (including benefits).  

The forgivable amount is equal to the amount spent on allowable costs in the covered period (8-to 24-weeks) after: 

  • You received your PPP loan funds or, 
  • The first day of your next payroll cycle 

There are 3 forgiveness applications: 

  • For businesses with PPP Loans at or under $150,000: Application 3508 S
  • For businesses with PPP Loans over $150,000:

Depending on the application you are eligible for, there are different documents required. 

Expenses: Payroll Documentation 

The 3508 S application does not require these documents to be submitted upfront, but you must retain them as they may be requested by the SBA to approve your forgiveness application. 

The 3508 EZ and 3508 applications do require these documents to be submitted upfront.

Please see the required documents in the table below.

CategoriesPreferred DocumentsOther Acceptable Documents 
Non-employers Monthly Net Income:

  • IRS Schedule C from 2019

Health Insurance / Retirement Contribution

  • Payment receipts, cancelled checks or account statements  
Employers Payroll

  • Payroll Service Providers; and 
  • Official Bank Statements
    (PDF extract over scans;
    .csv or screenshots will not be accepted)

Health Insurance / Retirement Contribution

  • Payment receipts, cancelled checks, or account statements
  • Payroll Tax Forms 
  • State quarterly business and individual wage reporting
  • Unemployment insurance that has been or will be reported

 

Expenses: Non-Payroll Documentation 

The 3508 S application does not require these documents to be submitted upfront, but you must retain them as they may be requested by the SBA to approve your forgiveness application.

The 3508 EZ and 3508 applications do require these documents to be submitted upfront.

Please see the required documents in the table below.

CategoriesPreferred DocumentsOther Acceptable Documents 
Rent:

  • Lease evidencing obligation as of February 15, 2020 
  • Lease payments over the covered period
  • Lease Agreement to evidence obligation as of February 15, 2020
  • Bank Statements to evidence expenses over covered period
  • Receipts or cancelled checks 
  • Lessor account statements 
Utilities: 

  • Utilities agreement evidencing obligation as of February 15, 2020
  • Utilities payments over the covered period 
  • Utilities Bill to evidence obligation as of February 15, 2020
  • Bank Statements to evidence expenses over covered period
  • Cancelled checks 
  • Account statements
  • Copies of invoices  
Mortgage Interest:

  • Evidence of mortgage obligation as of February 15, 2020
  • Mortgage interest payments over the covered period 
  • Amortization Schedule or Mortgage Payment Summary to evidence obligation as of February 15, 2020
  • Irrespective of the above, Bank Statements to evidence expenses over covered period
Cancelled checks 
Covered Operations Expenditures 
  • Copy of invoices, orders, or purchase orders paid during the Covered Period; and
  • Receipts, cancelled checks, or account statements verifying those eligible payments
Covered Property Damage Costs 
  • Copy of invoices, orders, or purchase orders paid during the Covered Period; and
  • Receipts, cancelled checks, or account statements verifying those eligible payments; and 
  • Documentation that the costs were related to property damage and vandalism or looting due to public disturbances that occurred during 2020 and such costs were not covered by insurance or other compensation
Covered Supplier Costs 
  • Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods); and
  • Copy of invoices, orders, or purchase orders paid during the Covered Period; and 
  • Receipts, cancelled checks, or account statements verifying those eligible payments
Covered Worker Protection Expenditures 
  • Copy of invoices, orders, or purchase orders paid during the Covered Period; and 
  • Receipts, cancelled checks, or account statements verifying those eligible payments; and 
  • Documentation that the expenditures were used by the Borrower to comply with applicable COVID-19 guidance during the Covered Period

 

Proof of Number of Full Time Employees or Average Paid Hours

The 3508 S application does not require these documents at all. 

The 3508 EZ application requires these documents, but only if Check Box 2 is selected (i.e., no reduction in headcount). The 3508 application always requires these documents. Please see the required documents below:

  • Payroll Service Provider Reports 
  • Payroll Records or Pay Stubs

Proof of Annual Salary or Hourly Wages 

The 3508 S and 3508 EZ applications do not require these documents at all. 

For the 3508 application, please see the required documents below:

Payroll

  • Payroll Service Provider Reports 
  • Payroll Records or Pay Stubs

Health Insurance / Retirement Contribution

  • Payment receipts, cancelled checks, or account statements

Safe Harbor Documentation  

These documents are not required to be submitted upfront for any of the forgiveness applications, but you must retain them as they may be requested by the SBA to approve your forgiveness application.

Safe Harbor 1: Inability to Operate

 

You must retain documentary proof as follows:

  • Applicable COVID related Orders or Guidance for the business location 
  • Bank Statements demonstrating decrease in business activity 

You should be able to establish a direct or indirect link between the relevant order/guidance with the reduction of business activity that you’ve experienced. 

Safe Harbor 2: Unsuccessful Attempts to Re-Hire 

SBA Guidance: Documentation regarding any employee job offers and refusals, refusals to accept restoration of reductions in hours, firings for cause, voluntary resignations, written requests by any employee for reductions in work schedule, and any inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020.

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