U.S. Small Business Administration Paycheck Protection Program

Applying for Forgiveness of your PPP Loan

 

Community First Guam Federal Credit Union is a certified lender in the U.S. Small Business Administration (“SBA”) Paycheck Protection Program.  The PPP is a federal program that authorized billions in forgivable loans to small businesses throughout the country to retain their employees during the COVID-19 crisis.

 

Borrowers have up to 10 months after the end of their covered period to apply for forgiveness of the PPP loan.  The forgiveness application process requires documentation to support or substantiate the use of the PPP funds.  At least 60% of the funds must have been used for payroll (or payroll-related) expenses.

 

Borrowers should refer to the SBA links at the bottom of this page for additional guidance.

 

STEP 1:

Gather Documents

 

  • Payroll records
    • IRS Form 941 for each quarter in 2019, 2020 and 2021
    • Payroll summary register for 2019, 2020 and 2021
    • 1099 forms (if applicable)
  • Rent/lease documents and payment receipts or bank statements if your payments are automatically deducted from your business operating account
  • Utility invoices and payment receipts or bank statements if your payments are automatically deducted from your business operating account
  • Any other supporting documents and payment receipts for any other expenses paid using PPP loan funds.

 

STEP 2:

Complete the SBA forgiveness application.

 

One application must be used for each draw; if you received both a 1st and 2nd draw, you must complete two application forms.

 

SBA Forgiveness Application Form 3508 is the full form and is generally intended for more complex business structures and/or larger loans.  Most borrowers will use form 3508EZ or 3508S.

 

Form 3508: https://www.sba.gov/document/sba-form-3508-ppp-loan-forgiveness-application-instructions

 

Form 3508EZ is used for borrowers with loan amounts greater than $150,000 and where the borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent and 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.

 

Form 3508EZ can also be used for borrowers with loan amounts greater than $150,000 and where the borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent and the borrower was unable to operate during the covered period at the same level of business activity due to compliance with guidance issued at the federal or local level.

 

Form 3508EZ: https://www.sba.gov/document/sba-form-3508ez-ppp-ez-loan-forgiveness-application-instructions

 

Form 3508S is used for borrowers with loan amounts of $150,000 or less.  This form requires fewer calculations and less documentation from borrowers.

 

Form 3508S: https://www.sba.gov/document/sba-form-3508s-ppp-3508s-loan-forgiveness-application-instructions

 

STEP 3:

Submit the completed and signed forgiveness application to Community First Guam along with all supporting documents.

 

A business officer will review the application and documents provided and will advise if additional documentation may be required based on our experience with other PPP loans similar to yours.  At times, SBA may request for additional documentation as they review the forgiveness application and supporting documents.

 

 

We have found that the forgiveness process takes upwards of three (3) months – primarily due to the review process and the heavy volume of loans.  Once we receive a response from SBA, we will reach out to you.

 

BEST PRACTICE

To ensure that your application and supporting documents are kept together, we ask that you provide us with the original completed and signed forgiveness application and copies of your supporting documents.

 

Please submit your application and documents in a sealed envelope and drop it off at  Member Business Loans, Tamuning Service Center during normal business hours.

 

Visit the official SBA website for additional information and guidance on the PPP Forgiveness Application:

 

https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program/ppp-loan-forgiveness

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