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Small Business Payroll

Paycheck Protection Program: Loan Details

Part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Paycheck Protection Program (PPP) was designed for small businesses to keep workers on the payroll. Under this program, the Small Business Administration (SBA) backs small-business loans through local banks. 

Small Business Paycheck Protection Program

The Paycheck Protection Program (PPP) provides small businesses with funds to pay up to your choice of 8 or 24-weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.

Customers who received funding through the SBA PPP may be eligible to request loan forgiveness. 

At this time, the SBA has not issued final guidance on all the details surrounding PPP loan forgiveness. There are questions that still need to be answered, but FNBT is seeking clarity.

As of 10/23/2020, here are a few things to know in order to qualify for full loan forgiveness:

Business LoanThe loan may be fully forgiven if the funds are used for: 

  • Payroll costs (at least 60% of the forgiven amount must have been used for payroll)
  • Interest on mortgages 
  • Rent
  • Utilities (electricity, gas, water, telephone, etc.)
  • Group health insurance premiums and other healthcare costs
*Corresponding contracts must have been in place on or before 2/15/2020. Borrower must provide copies of those contracts to FNBT (i.e. copy of the mortgage and/or corresponding note, utility bills, lease agreement, etc. all dated on or before 2/15/2020).

Loan forgiveness is not automatic, you must request it.

Forgiveness may be granted for some or all of the principal balance of the loan on eligible payments made within 8- or 24-weeks, depending upon your chosen covered period, from the date of loan disbursement (the date funds were deposited into your account). Based on the employer maintaining or quickly rehiring employees and maintaining salary levels., loan forgiveness may be reduced if full-time headcount declines, or if salaries and wages decrease.

  • Loan payments are deferred for 10-months after the end of your covered period, but interest will continue to accrue – even if the loan is not forgiven, in part or in full. The borrower will be responsible under the loan for any amounts not forgiven.
  • You should review and modify any automatic payments like ACH and automatic debits for the account holding these loan proceeds.
  • The SBA may limit the timeframe by which you’ll need to ask for forgiveness.

Required Documentation

There are three forgiveness applications, and which one you use depends upon your unique set of circumstances. Contact your FNBT relationship manager if you're unsure which one you should complete:

  1. 3508S ("Simple Application") - can be used by anyone who received a loan </= $50,000
  2. 3508EZ - can be used if you don't qualify for the simple form, didn't cut wages/salary or staff, or otherwise meet one of the exemptions noted within the application's instructions
  3. Full application - to be used if you don't qualify to use either of the above

For full forgiveness, customers will need to provide documentation for all expenses for which they plan to request forgiveness.

  • Payroll tax filings reported to the IRS
  • State income, payroll, and unemployment insurance filings
  • Canceled checks, payment receipts, transcripts of accounts
  • Any other documentation verifying payments towards covered expenses

View the PPP Loan Forgiveness Application Form & Instructions >>

For additional information, please see the Forgiveness FAQs on the Treasury's site. 


First National Bank and Trust is Here to Help

Since information and guidance on PPP loan forgiveness is still evolving, we are encouraging our clients to visit the U.S. Department of the Treasury website for the latest information. We will continue to update this page as information comes available. If you have questions, please contact your FNBT relationship manager.

Source: Small Business Administration (SBA) & U.S. Department of the Treasury
Updated 10/23/2020