Paycheck Protection Program (PPP) Loan Forgiveness Application

Loan Forgiveness Guidelines

Small businesses receiving loans through the Paycheck Protection Program (PPP) may apply for loan forgiveness for expenditures on payroll costs, payments of interest on covered mortgage obligations, payments on any covered rent obligation, covered utility payments, covered property damage costs, covered supplier costs, covered operations expenditures, and covered worker protection expenditures.

Payroll Costs

To qualify for the full amount of loan forgiveness, at least 60% of the loan proceeds must be used for payroll costs.

Payroll costs include:

  • Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis per employee).
  • Employee benefits, including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits, including insurance premiums; and payment of any retirement benefit.
  • State and local taxes assessed on compensation.

Loan forgiveness may be reduced if your PPP is over $50,000 and:

  • You did not use at least 60% of your PPP loan for Payroll Costs; or
  • You decrease your full-time employee headcount; or
  • You decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.

You have until December 31, 2020, or if your PPP loan was made after 12/27/2020, you have until the end of your loan’s covered period to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020

Interest on Mortgage Obligations

  • Payment of interest on any mortgage obligation, not including prepayment or payment of principal, incurred in the ordinary course of business that: (1) is a liability of the borrower; (2) is a mortgage on real or personal property; and (3) was incurred before February 15, 2020.

Rent Payments

  • Rent(s) obligated under a lease agreement in force before February 15, 2020.

Utility Payments

  • Payment for the service of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020.

Covered Operations Expenditure

  • Payment made 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 or tracking of supplies, inventory, records and expenses.

Covered Property Damage Cost

  • Cost related to property damage and vandalism or looting because of public disturbances that occurred during 2020 that was not covered by insurance or other compensation.

Covered Worker Protection Expenditure

  • Operating or capital expenditure to facilitate the adaptation of the business activities of an entity to comply with COVID-related 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 starting on March 1, 2020. Examples of such costs may include the purchase, maintenance or renovation of assets that create or expand drive-through window facilities, an indoor or outdoor air pressure ventilation or filtration system, physical barriers, expansion of additional indoor or outdoor space, health screening capability, other assets relating to the compliance with the requirements (as determined by the SBA), or personal protective equipment.

Covered Supplier Cost

  • Expenditure made to a supplier of goods that (1) are essential to the operations of the eligible entity at the time the payment is made, and (2) made pursuant to a contract, order or purchase order that existed either before the Covered Period or, if the goods are perishable, existed before or at any time during the Covered Period.

For more information on the loan forgiveness process under the PPP, visit the FAQs. Consult the list of required documents to make sure you have the necessary documentation to successfully complete the application.

Note: These guidelines are based on information from the SBA to date and are subject to change without notice. Loan forgiveness is not guaranteed and is not solely determined by Huntington Bank.