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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) provided small businesses funds to pay for 8 or 24-weeks, or any point in between, of eligible payroll costs. Funds could also be used to pay eligible business expenses, including interest on mortgages, rent, utilities, operating expenses, property damages, supplier costs, and worker’s protection expenses. However, a minimum of 60% of loan funds must have been used on eligible payroll costs.

PPP - Loan Forgiveness

Businessman on phone for LoanPPP loans may be eligible for forgiveness if the funds were used for eligible payroll and operational costs noted above. 

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 between 8 and 24-weeks from the date of loan disbursement (the date funds were deposited into your account). 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 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 will 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 are unsure which one you should complete:

  1. 3508S ("Simple Application"): Can be used by anyone who received a loan </= $150,000.00 and complied with all program rules
  2. 3508EZ (“Easy Application”): Can be used if you don't qualify for the simple form, did not cut wages/salaries or staff, or otherwise meet one of the exemptions noted within the application's instructions
  3. 3508 (“Long Form”): To be used if you do not qualify to use either of the above

Customers using the Simple Application only need to provide that document to apply for forgiveness. If you are eligible to use the Simple Application, you have two ways to apply: (1) through the SBA’s online portal, or (2) by submitting your application to the bank directly. If opting to work through the SBA’s online portal, see their website for full details and instructions.

For the Easy & Long Form applications, customers will need to provide documentation that shows loan funds were spent on eligible expenses, including but not limited to:

  • 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 SBA's site. 


First National Bank and Trust is Here to Help

We are encourage our clients to visit the U.S. Department of the Treasury website for the latest information. If you have questions, please contact your FNBT relationship manager.

Source: Small Business Administration (SBA) & U.S. Department of the Treasury
Updated 5/17/2021