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Getting Started with PPP Loan Forgiveness

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As we continue to receive direction on the detailed terms of loan forgiveness as outlined by the SBA, please keep the following in mind:

Loan Forgiveness is Not Automatic

You need to document how you have used the loan proceeds and submit a formal loan forgiveness application.

Loan Forgiveness is for Covered Expenses

Your PPP loan may be forgiven to the extent you use it for qualifying payroll costs, mortgage interest, rent/lease payments, utilities payments, operations expenditures, property damage costs, supplier costs, and worker protection expenditures, during a covered period between 8 and 24 weeks.

Loan Forgiveness Requires Documentation

Be ready to upload proof of how you utilized your PPP loan.

There are multiple versions of the PPP loan forgiveness application available. Our online loan forgiveness portal will help you determine which version to use.

Understanding the SBA's Requirements

For complete detail on requirements, please refer to See the below for a brief overview of the loan forgiveness requirements:

What Expenses are Covered

In order to be eligible for full loan forgiveness, at least 60% of your loan amount must be spent on payroll costs:

  • Payroll costs include: payments to employees in the form of salary/wages/commissions/tips; payment for vacation/parental/family/medical or sick leave; allowance for separation or dismissal; payment for employee benefits consisting of group health care/life/disability/vision/or dental insurance payment or premiums; retirement; and payment of state and local taxes assessed on compensation of employees
  • For a sole proprietor or independent contractor with no employees, payroll costs include: wages, commissions, income, or net earnings from self-employment

Once this payroll cost requirement is met, the loan amount is further eligible for forgiveness to the extent spent on Eligible Non-Payroll Expenses, including:

  • Business rent, utilities, or interest on mortgage obligations relating to services incurred or arising under an agreement executed before February 15, 2020
  • Certain operational expenditures for business software, cloud computing, other human resources and accounting needs
  • Costs related to property damage, excluding residential property damage, due to public disturbances that occurred during 2020 that was not covered by insurance
  • Supplier costs pursuant to a contract for goods in effect prior to taking out the loan that were essential to the borrower's operations at the time at which the expenditure was made
  • Personal protective equipment and adaptive investments to comply with health and safety guidelines related to COVID-19
  • Other expenses may qualify towards your loan forgiveness amount. Please refer to
  • Note: If you use less than 60% of your loan amount for eligible payroll costs, you will be eligible for partial loan forgiveness based on the amount of your loan used for such costs divided by 60% of your loan amount

Covered Period:

  • Eligible expenses must be incurred or spent during a period of between 8 and 24 weeks following the funding of the loan

What are the Payroll Requirements

If you are using Form 3508 or Form 3508EZ to maximize your loan eligibility for forgiveness, you had until December 31, 2020 (or, if you filed after December 27, 2020, until the last day of your covered period) to:

  • Restore your full-time employee level to offset any staff reductions that occurred between February 15, 2020 and April 26, 2020, or demonstrate and document your best faith efforts to retain employees during that time period.
  • Restore salaries and wages that were reduced more than 25% during a covered period between 8 and 24 weeks that applies to your loan as compared to the most recent full quarter before the covered period.
  • Generally, if you are using Form 3508S and your loan amount is $50,000 or less, you are exempt from any reductions in the borrower's loan forgiveness amount based on reductions in full-time equivalent (FTE) employees or reductions in employee salary or wages that would otherwise apply.
  • Please see the F A Q section for more information, including detailed provisions pertaining to Form 3508S and Form 3508EZ.

PPP Loan Forgiveness Example Scenarios

After the SBA provides a final decision on your loan forgiveness application, your loan's principal amount will be calculated as the original loan amount less any amount forgiven by the SBA based on expenses that qualified for loan forgiveness.

  • Scenario 1: Full Forgiveness
    If your PPP loan amount is $100,000, and your documented and approved expenses during the covered period between 8 and 24 weeks of your loan totaled $60,000 for payroll and $40,000 for other eligible expenses, then your loan would be forgiven in full.
  • Scenario 2: Partial Forgiveness
    If your PPP loan amount is $100,000, and your documented and approved expenses during the covered period between 8 and 24 weeks of your loan totaled $54,000 for payroll and $36,000 for other eligible expenses, then your outstanding loan balance would be $10,000, and interest would accrue on that amount at 1% per annum.

If you apply for loan forgiveness before the end of the tenth month following your covered period, you will not have to start making payments until the SBA makes a decision on your loan forgiveness application.

What Documentation is Needed

We continue to receive direction on the detailed terms of loan forgiveness from the SBA. Additional documentation may be required.

Documentation verifying the number of full-time equivalent employees on payroll, and their pay rates

Payment verification for covered mortgage obligations, lease or rent obligations, utility payments, and other covered expenses

Documentation showing the average number of full-time employees on payroll per month employed by you

Apply for PPP Loan Forgiveness

The application for PPP loan forgiveness is now available to access on your account dashboard.

If you do not already have online account access you can register now.

Apply Now
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Ways to Stay Informed

Check with the SBA

For the latest on the PPP and the loan forgiveness program, visit

Learn more about CARES

For detailed policy information on the CARES Act, visit

Register for a Webcast

Citi Senior Leaders will provide information on the PPP loan forgiveness process and review available SBA guidance during upcoming webcasts.