FAQ: Paycheck Protection Program Forgiveness

You are eligible for full or partial forgiveness if:

First draw criteria: 

During the 8- to 24-week covered period you: 

• Maintained employee and compensation levels;
• Spent the loan proceeds on payroll costs and other eligible expenses; 
• And at least 60% of the loan proceeds were spent on payroll costs.

 Second draw criteria: 

 During the 8- to 24-week covered period you: 

• Maintained employee and compensation levels in the same manner as was required for your first draw;
• Spent the loan proceeds on payroll costs and other eligible expenses; 
• And at least 60% of the loan proceeds were spent on payroll costs.

If you do not meet these criteria, you may still be eligible for partial forgiveness. Contact our offices at clientservice@dreamspring.org for personalized support and guidance on your forgiveness application.

In order to complete your forgiveness application, you will need to answer the following questions: 

• How many full-time employees did you have when you applied for your PPP loan?
• How many full time employees do you have today? 
• What is the dollar amount that you spent on payroll over the coverage period (you will also be asked to identify your coverage period or either 8 or 24 weeks)?
• and, are requesting full or partial forgiveness?

• Documentation verifying the eligible cash compensation and non-cash benefit payments from the 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: 
• Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and SBA Form 3508S (07/21) Page 4 Paycheck Protection Program PPP Loan Forgiveness Application Form 3508S Revised July 30, 2021.
• 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 group health, life, disability, vision or dental insurance, and retirement plans that you included in the Requested Loan Forgiveness Amount.

Non-payroll: 

• Documentation verifying existence of the obligations/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.
• 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 documentation that 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 expenditures you made comply with applicable COVID-19 guidance during the covered period.

Other Records: 

• All records relating to your PPP loan, including documentation submitted with your PPP loan application, documentation supporting your certifications as to your eligibility for a PPP loan (including your revenue reduction certification for a Second Draw PPP Loan, if applicable), documentation necessary to support your loan forgiveness application, and documentation demonstrating your material compliance with PPP requirements. Records Retention Requirement: 

• You must retain all employment records/payroll documentation in your files for four years and all other documentation for three years after the date the loan forgiveness application is submitted to the lender, and permit authorized representatives of SBA, including representatives of your Office of Inspector General, to access such files upon request. 

• You must provide documentation independently to a lender to satisfy relevant Federal, State, local or other statutory or regulatory requirements or in connection with an SBA loan review or audit.

No. DreamSpring’s platform accepts and processes forgiveness applications for our clients. This platform prefills 90% of your application and makes the process faster and easier for you.

No. The Small Business Administration requires a unique PPP forgiveness application for each PPP loan.

• Employees working more than 30 hours per week count as 1 FTE.
• Employees working less than 30 hours per week count as .5 FTE.

For example: One employee works 40 hour per week (one FTE) and two employees work 15 hour per week each (together, these two individuals equal 1 FTE). Therefore, these three individuals would total TWO full time employees. 

Approach 2: 

• Employees are counted as .1 for every four hours they work, not to exceed 1 FTE per employee regardless of hours worked.

Example: A 16-hour per week employee would count as .4 FTE

Example: A 36-hour per week employee would count as .9 FTE

Example: A 50-hour per week employee would count as 1 FTE

Yes. You are considered your own employee as you earn an income provided by the business. Count yourself as (1) employee. If you have any other employees, refer to question 9 on counting their full-time employee status.

• Employee and compensation levels were maintained;
• The loan proceeds were spent on payroll costs and other eligible expenses; 
• And, at least 60% of the proceeds were spent on payroll costs.
• Second draw PPP loans qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
• Employee and compensation levels were maintained in the same manner as required for the first draw PPP loan;
• The loan proceeds were spent on payroll costs and other eligible expenses;
• And, at least 60% of the proceeds were spent on payroll costs.