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Client Resources - Paycheck Protection Program Loan Forgiveness

MoFi is here to help you get your PPP loan forgiven.

Our forgiveness process will open in September 2021. We’ll contact you when it’s your turn to apply! 

Wondering how to spend your PPP funds or qualify for loan forgiveness? Scroll down for a list of FAQs, or click here to visit the Small Business Administration’s FAQ page.

Frequently Asked Questions (Updated 7/8/21)

When can I apply for PPP loan forgiveness?

  • MoFi will open the PPP loan forgiveness process in September 2021. Because we have a large volume of PPP clients, we'll be opening the forgiveness process in rounds, based on the date you received your loan funds.
  • We’ll email you when it’s your turn to apply for forgiveness. We cannot process your application if it’s not yet your turn to apply. Please wait for us to contact you.
  • Please Note: You have 6 months (24 weeks) from the date you received your loan to use 100% of the funds. You have 16 months from the date you received your loan to apply for PPP forgiveness. There is plenty of time to complete this process, and we're here to help with every step!
  • How do I apply for PPP loan forgiveness?

    We'll contact you when it's your turn to apply for forgiveness! We'll share application instructions and a list of required supporting documents.

    Once I submit my forgiveness application, how long will it take to learn if my loan was forgiven?

  • We will let you know when it's your turn to apply for forgiveness. Once MoFi receives your complete forgiveness application, we have 60 days to review and process it.
  • Once we approve the application internally, we will submit it to the Small Business Administration (SBA).
  • After receiving your application from MoFi, the SBA has 90 days to review it.
  • We will contact you once your loan has been forgiven.
  • What is a covered period, and how do I calculate mine?

  • Your covered period (also known as a coverage period) is the 8- or 24-week period in which you must use all of the PPP loan proceeds. As the business owner, you select your covered period (either 8 or 24 weeks). We strongly encourage MoFi clients to select a 24-week covered period.
  • A 24-week covered period starts on the day your loan proceeds landed in your bank account and ends 167 days later. Click here to download a covered period calculator.
  • Borrowers have 10 months after the last day of their covered period to apply for forgiveness.
  • How do I qualify for full forgiveness of my PPP loan?

  • Your loan will be fully forgiven if at least 60% of the funds are used on payroll in the 8- or 24-week period following your loan’s funding date.
  • You can use up to 100% of the loan for payroll.
  • If you use less than 100% of the loan for payroll, then the remaining 40% can go toward other eligible, nonpayroll expenses.
    MoFi Tip: Using 100% of your loan for payroll is the simplest way to meet the Small Business Administration's forgiveness requirements.

    What payroll costs are eligible for PPP forgiveness?

    Eligible payroll costs include the following, if paid or incurred during the covered period:
  • Gross salary, gross wages, gross tips, gross commissions, paid leave (vacation, family, medical or sick leave, not including leave covered by the Families First Coronavirus Response Act), and allowances for dismissal or separation;
  • Payments for employer contributions for employee health insurance, including employer contributions to a self-insured, employer-sponsored group health plan, but excluding any pre-tax or after-tax contributions by employees;
  • Payments for employer contributions to employee retirement plans, excluding any pre-tax or after-tax contributions by employees;
  • Payments for employer state and local taxes assessed on employee compensation (such as state unemployment insurance tax), excluding any taxes withheld from employee earnings;
  • Payroll costs may include bonus and hazard pay, and may include salaries paid to furloughed employees.
    Please Note: No business owner can earn more than $20,833 and no employee can earn more than $46,154 during the 8- or 24-week covered period.
    MoFi Tip: Using 100% of the PPP loan proceeds for eligible payroll costs is the simplest way to meet the requirements for full forgiveness from the Small Business Administration.

    Are employer contributions to a group health insurance plan or retirement plan eligible payroll costs?

    For employees
  • Health care and retirement benefits paid or incurred during the covered period are eligible for forgiveness as payroll costs. Expenses paid by employees for such benefits are not eligible for forgiveness. Expenses for future periods that are accelerated into the covered period are also not eligible for forgiveness.
    For self-employed individuals and general partners
  • Employer health insurance contributions and employer retirement contributions made on behalf of self-employed individuals or general partners are not eligible expenses.
    For owner-employees of S-corps
  • Employer health insurance contributions are not included for owners (and their family members) having at least a 2% stake of an S-corp. Employer retirement contributions made on behalf of an owner-employee of an S-corp are eligible and do not count toward the cash compensation cap of $20,833 per individual, and are capped at the amount of 2.5x their monthly employer retirement contribution in the year that was used to calculate the loan amount (2019 or 2020).
    For owner-employees of C-corps
  • Employer health insurance contributions and retirement contributions are eligible expenses. Retirement costs are capped at 2.5 x monthly employer retirement contribution in the year that was used to calculate the loan amount (2019 or 2020). These payments do not count toward the $20,833 cap per individual.
    MoFi Tip: Using 100% of the PPP proceeds toward gross wages is the most straightforward way to achieve forgiveness from the Small Business Administration.

    Am I still eligible for full forgiveness if I reduced the number of people I employ?

    The short answer is yes. However, businesses must meet the following Small Business Administration requirements:
  • The borrower did not reduce annual salaries or hourly wages of any employee by more than 25% during the covered period compared to the most recent full quarter before the covered period, AND
    EITHER:
  • The borrower did not reduce the number of employees OR the average paid hours of employees between January 1, 2020 and the end of the covered period
    OR:
  • The borrower was unable to operate during the covered period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020, and December 31, 2020 (or, for a PPP loan made after December 27, 2020, requirements established or guidance issued between March 1, 2020 and the last day of the covered period) by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.
    Please Note: If you have had reductions in employees AND/OR reductions in full-time equivalent (FTE) employees, and are wondering how this reduction will impact your forgiveness application, please contact us.

    What nonpayroll costs are eligible for PPP forgiveness?

    Eligible nonpayroll costs cannot exceed 40% of the total forgiveness amount. An eligible nonpayroll cost must be either paid during the 8- or 24-week covered period or incurred during the covered period and paid on or before the next regular billing date, even if the billing date is after the covered period. Business owners should count nonpayroll costs that were both paid and incurred only once.
    According to the Small Business Administration, eligible nonpayroll costs consist of:
  • Covered mortgage obligations: Payments of mortgage interest (not including any prepayment or payment of principal) on any business mortgage obligation on real or personal property incurred before February 15, 2020
  • Covered rent obligations: Business rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020
  • Covered utility payments: Business payments for a service for the distribution of electricity, gas, water, telephone, transportation, or internet access for which service began before February 15, 2020
  • Covered operations expenditures: Payments for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting of tracking of supplies, inventory, records, and expenses
  • Covered property damage costs: Costs related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that were not covered by insurance or other compensation
  • Covered supplier costs: Expenditures made to a supplier of goods for the supply of goods that are essential to the operations of the borrower at the time at which the expenditure is made, and made pursuant to a contract, order, or purchase order in effect prior to the beginning of the covered period (for perishable goods, the contract, order, or purchase order may have been in effect before or at any time during the covered period)
  • Covered worker protection expenditures: Operating or capital expenditures that facilitate the adaptation of the business activities of an entity to comply with the requirements established or guidance issued by the Department of Health and Human Services, the Centers for Disease Control, or the Occupational Safety and Health Administration, or any equivalent requirements established or guidance issued by a state or local government, during the period starting March 1, 2020 and ending on the date on which the national emergency declared by the President with respect to the Coronavirus Disease 2019 (COVID-19) expires related to maintenance standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19, but does not include residential real property or intangible property.
  • Can I use my PPP loan proceeds for rent and utilities?

    Yes, you can use up to 40% of the PPP loan proceeds for rent and utilities, but you must maintain the following records:
  • Copies of all utility invoices paid during the 8- or 24-week covered period, with proof of payments
  • A copy of your lease agreement. If you are the owner of the building you rent, only the mortgage interest qualifies for forgiveness, not the entire rent payment.
  • Copies of all checks or bank statements showing the payments were made
  • Copies of your lease or utility invoices dated prior to FEBRUARY 15, 2020, demonstrating you had those services prior to the COVID-19 pandemic
  • What records do I need to maintain?

  • Payroll report for your entire 8- or 24-week covered period which shows the name of each employee, pay periods, pay dates, gross wages paid, and net pay
  • MoFi Tip: Almost all third-party payroll providers have created a Small Business Administration-specific report just for PPP forgiveness! In QuickBooks, this feature is called the PPP Cash Compensation Report. You can create this report for your business by navigating to 'Reports' and scrolling to the bottom of the list.
  • Bank statements confirming you disbursed the payroll
  • If you paid yourself with owner draws, please make sure to provide both business and personal bank statements showing the draw from your business and subsequent deposit to your personal account.
  • I am a sole proprietor with one bank account. I do not typically write myself paychecks. What payroll records do I need to keep?

    If you are a sole proprietor with one account, and you treated the deposit of the PPP loan proceeds as direct payroll, please maintain the following records:
  • A copy of your bank statement showing the deposit
  • A copy of your 2019 and 2020 Schedule Cs (which are included as part of your personal tax returns)