Forgiveness is based on the employer using at least 75% of the loan proceeds for payroll costs and maintaining or quickly rehiring employees and maintaining salary levels. Not more than 25% of the loan proceeds may be used for certain eligible non-payroll costs (rent, mortgage interest payments, and utilities). The loan proceeds must be used in an eight-week period which begins the date the employer receives the loan funds.
Unused or ineligible uses of loan proceeds will be deducted from forgiveness and will be due over the remaining 18 months at an interest rate of 1%.
Preparing For Loan Forgiveness
On May 15, 2020, the Small Business Administration and the Treasury Department released the Paycheck Protection Program (PPP) Loan Forgiveness Application which you should review in detail as you prepare the necessary documentation in the forgiveness process.
We continue to be in close communication with the Small Business Administration and the Treasury Department as further guidance on PPP forgiveness requirements are sure to be released. Do not submit the Loan Forgiveness Application to IncredibleBank until you receive further instructions.
We encourage you to review this web page on a regular basis, and we will continue to update our customers via email as developments occur. In the interim, it is prudent to get prepared by:
- Reading the application in entirety
- Running calculations
- Speaking with your advisors
- Document, document, document (see page 10 of application)