Things to Remember on Obtaining Forgiveness of PPP Loans

May 21, 2020 Written by

As some small businesses are seeing PPP loan funds come in, the most logical next question that comes to people’s mind is, “how do I make sure my loan is forgiven?”.

First of all you have to remember to apply for Loan forgiveness. The form has just been made available by the SBA.

Be sure to do the following:

  • Detailed recordkeeping for both payroll and non-payroll related expenses being paid with PPP loan funds will be crucial, starting from the day the funds hit your business bank account.
  • Business owners must keep employees on the payroll or rehire quickly and maintain salary levels.
  • Forgiveness will be reduced if you have a reduction in number of staff or wages.


  • At least 75% of loan funds must be used for ongoing payroll costs – salaries, wages, commissions or tips (capped at $100,000 on an annualized basis for each employee).  Additional payroll costs include – employee benefits, vacation, parental, family, medical or sick leave; payments required for the provisions of group health care benefits.
  • Maximum of 25% of loan funds may be used for non-payroll related costs including interest payments on any covered mortgage obligation incurred before Feb. 15, 2020; payments of rent under a lease in force prior to Feb. 15, 2020; utility payments for which service began before Feb. 15, 2020.

Forgiveness will be reduced if you:

  • Fail to maintain the same number of full-time equivalents during the covered period when compared to your defined look back period.
  • Decrease wages paid by more than 25% for employees that making less than 100k per year.


Also remember for the loan amounts not forgiven, you have 24 months with a 6 month deferral to pay back the funds at a 1% interest rate.

Feel free to contact the office if you need help applying for forgiveness.



Written by: Doug Rodrigues