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To receive loan forgiveness, a borrower must complete and submit the Loan Forgiveness Application (SBA Form 3508, 3508EZ, 3508S or lender equivalent) to NCB.
NCB will send a link to log in to the Atlas Platform for the Loan Forgiveness Application. The link is good for 72 hours, so please start the application as soon as you receive the email.
Borrowers can use the new S form if their PPP loan amount is $150,000 or less.
Borrowers that received a PPP loan of more than $50,000 (and borrowers with a PPP loan of less than $50,000 that together with their affiliates received PPP loans totaling $2 million or more) must adjust their “Requested Loan Forgiveness Amount” due to statutory requirements concerning reductions in either full-time equivalent (FTE) employees or employee salary and wages.
All borrowers completing the new S form must also adjust their “Requested Loan Forgiveness Amount” if less than 60% of the PPP loan was used on payroll costs or if the PPP loan amount was used to pay owners or employees in excess of the caps.
When submitting this S form, borrowers are not required to submit calculations or documentation unless the forgiveness application is for a Second Draw loan that did not provide documentation of the 25% revenue reduction requirement on the PPP loan application. However, borrowers are still required to maintain records of their calculations and documentation.
While up to 100% of the loan is eligible for forgiveness, requirements must be met for the funds to qualify for forgiveness. First, only loan proceeds that are used for an eligible purpose under the program may be forgiven. Eligible purposes include payroll and non-payroll costs such as payments of interest on mortgage obligations, rent, and utilities in place before February 15, 2020. Other non -payroll costs include covered operations expenditures, covered property damages costs, covered supplier costs, and covered worker protection expenditures incurred in the covered period. Second, these expenses are only eligible if they were paid or incurred in the covered period.
Third, the forgiveness amount will be reduced for the following reasons: the percentage of loan proceeds spent on payroll is less than 60%, the employee count has decreased, or employees had their compensation reduced by more than 25%.
Depending on the type of loan forgiveness application you complete, there are four broad categories of documentation that must be provided with your loan forgiveness application: payroll expenses, your full-time equivalent (FTE) employee count, non-payroll eligible expenses, and revenue reduction documentation. There are also several documents that need to be maintained in addition to those that must be provided with the application.
Documents that Must Be Submitted with Your Application:
No more than 40% of the loan forgiveness amount can be for eligible expenses other than payroll (i.e. mortgage interest, rent, and/or utilities). The SBA and Treasury Department have indicated that if a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.
The definition of “payroll costs” for the Paycheck Protection Program includes the following:
For PPP forgiveness purposes, a covered utility payment includes payment for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020.