SBA PPP Loan Forgiveness Application: Required Documentation

On May 15, 2020, the Small Business Administration released the Loan Forgiveness Application for the Paycheck Protection Program (the “Application”).

The application is comprised of four components:

1. The PPP Loan Forgiveness Calculation Form;
2. The PPP Schedule A;
3. The PPP Schedule A Worksheet; and
4. The (optional) PPP Borrower Demographic Information Form.

The Application also includes a list of documents that each borrower must submit with the Application, and a list of documents that each borrower must retain as part of the PPP loan. All documents must be retained for six years after the date the loan is forgiven or repaid in full.

Documents to be Submitted with Application:

• PPP Loan Forgiveness Calculation Form
• PPP Schedule A
• Payroll Support:
  • 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.
• Full-Time Equivalent Support
  • Documents supporting the borrower’s calculation the FTE.  Documents may include 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 (documents submitted may cover periods longer than the specific time period).
• Non-payroll Support: Documentation verifying existence of the obligations or services prior to February 15, 2020, and eligible payments from the Covered Period.
  • 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.

Documents to be Maintained:

Documents that each borrower must maintain but is not required to submit.

PPP Schedule A Worksheet (or its equivalent and the following:

• Documentation supporting the listing of each individual employee in PPP Schedule A Worksheet Table 1, including the “Salary/Hourly Wage Reduction” calculation, if necessary.
• Documentation supporting the listing of each individual employee in PPP Schedule A Worksheet Table 2; specifically, that each listed employee received during any single pay period in 2019, compensation at an annualized rate of not more than $100,000.
• Documentation regarding any employee job offers and refusals, firings for cause, voluntary resignations, and written requests by any employee for reductions in work schedule.
• Documentation supporting the PPP Schedule A Worksheet “FTE Reduction Safe Harbor.”

Necessity Support:

All records relating to the Borrower’s PPP loan, including documentation submitted with its PPP loan application, documentation supporting the Borrower’s certifications as to the necessity of the loan request and its eligibility for a PPP loan, documentation necessary to support the Borrower’s loan forgiveness application, and documentation demonstrating the Borrower’s material compliance with PPP requirements.