SBA Paycheck Protection Program FAQ

The following FAQs are current as of March 12, 2021.

These questions and answers are being provided as a convenience. The answers are based on our interpretation of the SBA Final Rule. This information does not, and is not intended to, constitute legal advice; instead, all information, content, and materials are for general informational purposes only. The information below may not constitute the most up-to-date legal or other information and Enterprise Bank & Trust may update this information without notice. You should contact your attorney to obtain advice with respect to any particular legal matter below. Enterprise Bank & Trust gives no warranty and accepts no responsibility or liability for the accuracy or the completeness of the information and materials contained below. All liability with respect to any action taken or not taken based on the content below is hereby expressly disclaimed.

When will Enterprise begin accepting forgiveness applications?

Enterprise is currently accepting forgiveness applications for any PPP loan obtained during the first round of funding in 2020.

All Enterprise PPP clients received an email from us with a link to their Loan Forgiveness Application when we begin accepting applications. We are using a system that allows Enterprise PPP borrowers to electronically submit their forgiveness application and supporting documents. We strongly encourage our PPP borrowers to use our electronic forgiveness platform which will pre-fill portions of your application, making the process more efficient for you. However, if you cannot complete an electronic application, please notify us by sending an email to [email protected].
 
Please visit our SBA PPP Loan Forgiveness page for more information.

What is the deadline for submitting forgiveness applications?

The date in the upper right hand corner on Form 3508 and 3508EZ is used by the SBA and is not the forgiveness deadline. 

Borrowers may submit a loan forgiveness application any time on or before the maturity date of the loan—including before the end of the covered period—if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness.

The maturity date of the loan is either two or five years from loan origination depending on the origination date.

If a borrower does not apply for loan forgiveness within 10 months after the last day of the borrower’s loan forgiveness covered period, loan payments are no longer deferred and the borrower must begin making payments on the loan. 

What are the cash compensation limits?

• $100,000 compensation limit for Employees - For each individual employee, the total amount of cash compensation eligible for forgiveness may not exceed an annual salary of $100,000, as prorated for the Covered Period. For an 8-week Covered Period, that total is $15,385. For a 24-week Covered Period, the total is $46,154. 
• $100,000 compensation limit for Owner-employees, a self-employed individual, or general partners - The amounts paid to owners (owner-employees, self-employed individuals or general partners) for a 24-week Covered Period, is capped at $20,833 (the 2.5-month equivalent of $100,000 per year) for each individual or the 2.5-month equivalent of their applicable compensation in 2019, whichever is lower. For an 8-week Covered Period, this amount is capped at 8/52 of 2019 compensation (up to $15,385).

What supporting documents do I need to provide with the forgiveness application?

Each borrower must submit documentation with its PPP Loan Forgiveness Application Form 3508 or 3508EZ to the lender. You should gather the following documents verifying eligible expenses, including the number of full-time equivalent employees on your payroll and their pay rates for the time frame used to verify you met the staffing and pay requirements. If you are completing Form 3508S, supporting documentation is not required.
 
Payroll Expenses - Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following:

• Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.
  • Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period:
    • Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
    • State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.
  • Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the Borrower included in the forgiveness amount.

Nonpayroll Expenses - Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period. (Remember: This only applies if you included nonpayroll expenses in the amount for which you are trying to seek forgiveness.)

• Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments. 
• Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments. 
• Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.
• Covered operations expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.
• Covered property damage costs: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the costs were related to property damage and vandalism or looting due to public disturbances that occurred during 2020 and such costs were not covered by insurance or other compensation.
• Covered supplier costs: Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods), copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.
• Covered worker protection expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the expenditures were used by the Borrower to comply with applicable COVID-19 guidance during the Covered Period.

Where can I get more information on the PPP forgiveness process and rules?

A link to the SBA's loan forgiveness page is here.

Is the borrower demographic information on the PPP forgiveness application required?

No, the disclosure of this information is optional and voluntary and will have no bearing on the loan forgiveness decision.

Where can I get help on the forgiveness application?

Please visit our SBA PPP Loan Forgiveness page for more information.

When will I know how much of my loan will be forgiven?

Upon receipt of a complete application, Enterprise has 60 days to review your application and supporting documentation and make a loan forgiveness recommendation to the SBA. We’ll contact you if we need additional information. We will notify you when we submit your loan forgiveness application to the SBA. The SBA will process your application within 90 days of our recommendation and notify Enterprise of its decision. Enterprise will notify you of the final SBA decision.

When do I have to start making principal and interest payments on my PPP loan?

If the borrower does not apply for loan forgiveness within 10 months after the last day of the covered period, or if SBA determines that the loan is not eligible for forgiveness (in whole or in part), the PPP loan is no longer deferred and the borrower must begin paying principal and interest. If this occurs, the lender must notify the borrower of the amount and date the first payment is due.

Which forgiveness application, Form 3508, Form 3508EZ or Form 3508S, should I submit?

There are three forgiveness applications: Form 3508, Form 3508EZ and Form 3508S. Our forgiveness platform will allow you to check your S or EZ Form eligibility.

Form 3508S is for loans with an amount of $150,000 or less that does not meet certain SBA affiliate rules. Form 3508S  requires fewer calculations and does not require submission of documentation for eligible borrowers. 

• Borrowers that use SBA Form 3508S are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages. SBA Form 3508S also does not require borrowers to show the calculations used to determine their loan forgiveness amount. However, SBA may request information and documents to review those calculations as part of its loan review process.

For review purposes only, the Form 3508S and instructions are here.

Form 3508EZ applies to borrowers who meet any one of the following criteria:

• The Borrower is a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form. 
• Did not reduce salary or wages for any employee by more than 25% during the covered period AND did not reduce the number or hours of their employees (excepting laid-off employees who refused an offer to return).
• Did not reduce salary or wages for any employee by more than 25% during the covered period AND experienced reductions in business activity as a result of health directives related to COVID-19.

If you meet at least one of the criteria above, you will be allowed to use the SBA Form 3508EZ to apply for forgiveness. For review purposes only, the Form 3508EZ and instructions are here.

Form 3508 is a longer form and requires a Schedule A to be submitted. If you do not meet the criteria for Form 3508EZ or 3508S, you must apply for forgiveness of your PPP loan using SBA Form 3508. For review purposes only, the Form 3508 and instructions are here.

Form 3508 requires Schedule A. Do I have to use the Excel worksheet provided in your platform or can I enter directly into Schedule A?

There are two options for completing Schedule A:

• If calculations have already been made using a third-party payroll provider or other methods, numbers can be typed directly into the corresponding fields on Schedule A without the need for the Excel worksheet. 

OR 

• Use the Excel worksheet - Download, complete and upload the Excel worksheet using instructions provided on the worksheet.

What size loans will the SBA review?

The SBA may review any PPP loan of any size at any time at its discretion. If SBA undertakes such a review, SBA will notify the Lender and the Lender must notify the borrower in writing within five business days of receipt of notification. The SBA may also request additional information directly from the borrower. 

What are the records retention requirements for the PPP program?

Borrowers are required to retain PPP loan supporting documents for a period of six years after the date that the loan is forgiven or repaid in full. Such information includes payroll documentation, documentation supporting the borrower’s certifications, documentation delivered in connection with, and in support of, the borrower’s loan forgiveness application, and any other records demonstrating material compliance with PPP requirements. Questions about PPP records retention should be directed to your legal counsel, financial advisor or accountant for assistance.

What can I use my funds for?

The permitted use of proceeds are:

1. Payroll costs
2. Rent
3. Utilities
4. Interest on mortgages
5. Interest on other debt obligations on debt incurred before February 15, 2020
6. Covered Operations Expenditures
7. Covered Property Damage Costs
8. Covered Supplier Costs
9. Covered Worker Protection Expenditures

To be eligible to receive full loan forgiveness, a borrower must use at least 60 percent of the PPP loan for payroll costs, and not more than 40 percent of the loan forgiveness amount may be attributable to non-payroll costs. Forgiveness will be reduced proportionally if payroll does not meet the 60% threshold.

How long do I have to spend the loan proceeds?

The Covered Period begins on the date the loan was originally disbursed. It ends on a date selected by the Borrower that is at least 8 weeks following the date of loan disbursement and not more than 24 weeks after the date of loan disbursement. For example, if the Borrower received their PPP loan proceeds on Monday, April 20, 2020, the first day of the Covered Period is Monday, April 20, 2020 and the final day of the Covered Period is any date selected by the Borrower between Sunday, June 14, 2020 and Sunday, October 4, 2020.

I received my PPP funds and want to change the amount. What should I do?

No changes are permitted after your PPP loan has been funded.

What changes did the  Paycheck Protection Program Flexibility Act of 2020 make to the Program?

This Act provided flexibility for the following:

• Created a new exemption for borrowers to avoid a reduction in loan forgiveness amount when they have a reduction in full-time equivalent employees.
• The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest.
• To be eligible to receive full loan forgiveness, a borrower must use at least 60 percent of the PPP loan for payroll costs, and not more than 40 percent of the loan forgiveness amount may be attributable to nonpayroll costs. Forgiveness will be reduced proportionally if payroll does not meet the 60% threshold.

Can I repay my PPP loan?  

Yes, Borrowers may repay their PPP loan at any time without a prepayment penalty. You will be charged accrued interest on the PPP loan for any time it was outstanding. For repayments after May 18, 2020, the certifications you made on your application remain subject to SBA review.

Does Enterprise pay agents or agent fees?

Enterprise may pay agent fees if the agency is disclosed at the time the loan application is submitted and the parties reach a contractual agreement for fees that are consistent with SBA requirements.

Who can help answer my question if it’s not on the website?

Due to the overwhelming number of questions, we are asking borrowers to discuss questions with their legal counsel, financial advisor or accountant for assistance. Ultimately, the accuracy of the calculation is the responsibility of the applicant. For more information on the program, you can review the SBA website at SBA.gov.