SBA Paycheck Protection Program Loan Forgiveness FAQ

Your account officer is available to answer questions you have and will contact you if MidFirst needs additional information. If you do not know who your account officer is, you can find out on the Application Status screen after you log in to the application portal.

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Yes.

You must apply for forgiveness of your First Draw and Second Draw PPP Loans separately.

Customers with PPP loans more than $150,000 must also submit the forgiveness application for their First Draw Loan before (or simultaneously with) their Second Draw Loan.

If you received your First Draw or Second Draw Loan from a lender other than MidFirst, you must apply for forgiveness with the lender that made that loan.

All customers will use the MidFirst online forgiveness application portal to submit their forgiveness application. Forgiveness applications for loans $150,000 or less will use SBA’s Form 3508S, SBA’s shortest form which does not require that you show your forgiveness calculation or provide documents supporting your forgiveness amount. Note: While SBA has released its own Direct Forgiveness Platform, MidFirst customers will use our online forgiveness platform (not SBA’s). After careful evaluation, MidFirst’s platform will deliver a superior customer experience using your existing MidFirst PPP account login information.

For Second Draw PPP Loans $150,000 or less, SBA originally required customers to provide gross receipts during their forgiveness application if they did not provide gross receipts documentation when they received their loan. On the Second Draw Borrower Application Form used to obtain the loan, you certified that you realized a gross receipts reduction in excess of 25%. You also certified that you would provide documentation of this reduction when applying for forgiveness (unless you provided this when you applied for your Second Draw PPP Loan).

Update: SBA has assigned each customer a COVID Revenue Reduction Score (based on a variety of factors including industry, geography, and business size) to be used in lieu of customers providing gross receipts documentation at forgiveness. SBA has provided MidFirst with each customer’s COVID Revenue Reduction Score and, as a result, the majority of MidFirst customers using the 3508S application for a Second Draw loan will not be required to provide gross receipts documentation. When you apply for forgiveness of your Second Draw loan, MidFirst’s portal will indicate to you whether or not you have to provide gross receipts documents.

See Question 25: “What gross receipts documentation is required for a Second Draw Loan $150,000 or less?"

All customers will use the MidFirst online forgiveness application portal to submit their forgiveness application. Forgiveness applications for loans more than $150,000 require the customer to provide their forgiveness calculations and upload supporting documents using our online portal, which will guide the customer through either SBA’s Form 3508 (standard) or Form 3508EZ. To determine which form you will use, see the EZ checklist here.

See question 6: "What documents am I required to submit with my application?"

This depends on what forgiveness application form you use. Step 1 of Preparing to Apply for Forgiveness will help you decide which of the SBA's forms to use. Then, click on the document checklist for the form you plan on using below to see what documents are required.

First Draw Loans using the 3508S application do not require any documents. For Second Draw Loans using the 3508S application, see Question 4: “What is the forgiveness process for PPP loans $150,000 or less?”

Form 3508S (Second Draw, if applicable)

Form 3508EZ

Form 3508 (standard)

Your forgiveness amount depends on the amount you spent on payroll and nonpayroll costs during the Covered Period you select. See Question 14: "What is the Covered Period?"

Form 3508S may require customers to perform certain FTE or salary/wage rate reductions in their forgiveness calculation if they either (1) received First Draw or Second Draw PPP Loans totaling $2 million or more or (2) their First Draw or Second Draw PPP Loan is between $50,001 and $150,000. To see if you must perform these reductions, please read the 3508S application instructions here.

Form 3508 requires FTE calculations for the entire Covered Period.

Both Form 3508 and Form 3508EZ require you to make certain certifications and representations for the entire Covered Period. Additionally, Form 3508 and Form 3508EZ require IRS and state payroll tax filings for the periods that “overlap the Covered Period”. Unfortunately, by law, Borrowers cannot receive forgiveness without providing all required documentation.

Customers will be invited in waves to apply for forgiveness. If the Covered Period you select has not ended, you will be allowed to start your application but will not be allowed to finish it until your Covered Period has ended.

Yes. However, please note that information that you have already entered will not be transferred from one form to the other, and your information will not be able to be recovered after you switch from one form to the other. Only information that we prefilled for you (PPP loan number, for example) would be maintained.

No. There is no requirement that you input all payroll costs and nonpayroll costs that are eligible, other than SBA’s requirement that payroll costs make up at least 60% of your loan forgiveness amount.

For payroll costs and nonpayroll costs you choose to include in your forgiveness calculation, please see Question 6: “What documents am I required to submit with my application?” MidFirst will review the calculations and documents you provide for payroll costs and nonpayroll costs and reach out to you if we have questions or identify errors.

If you receive any loan forgiveness, SBA will pay the interest that accrues on the portion of your loan that is forgiven from the date you received your loan until the date SBA pays MidFirst your forgiveness. You will only be responsible for the interest that accrues on any portion of your loan that SBA does not forgive (from the date you received your loan until the loan is paid in full).

If you do not receive any loan forgiveness, you will be responsible for all interest that accrues for the life of your loan.

Once MidFirst receives all the SBA-required documents, we will review your calculations and documents and make our decision regarding the forgiveness amount. If we have questions, your account officer will contact you. Once MidFirst completes its review and notifies SBA, you will receive an email.

Once MidFirst notifies SBA, then SBA has 90 days to pay MidFirst the forgiveness amount. If SBA has questions, this process may take longer. Once SBA pays MidFirst your forgiveness amount, MidFirst will email you. If you have a remaining balance after forgiveness, this email will contain your remaining balance, first payment date and monthly payment amount.

After you submit an application that is complete, MidFirst has 60 days to submit a forgiveness decision to SBA. Your application is complete once MidFirst has confirmed that you have submitted all documentation required to make our decision. If it is determined that you have not submitted all required documents, we will reach out to you to request what we need.

After MidFirst submits a forgiveness decision to SBA, SBA is supposed to pay MidFirst the amount of your forgiveness within 90 days. However, if SBA requests additional information or reviews your loan, this process may take longer.

You need to use the funds within the Covered Period. See Question 14: “What is the Covered Period?”

The Covered Period is the time frame during which your spending of PPP loan proceeds is eligible for loan forgiveness.

See Question 15: “How long is my Covered Period?”

The Covered Period begins on the date your PPP loan proceeds were disbursed and ends on any day of your choosing, between the 55^th and 167^th day thereafter (8 to 24 weeks including the date of disbursement).

For example, if your PPP funds were disbursed on 5/26/2020, you may select a Covered Period ending on 7/20/2020 (8 weeks), 11/9/2020 (24 weeks), or any day in between those two dates.

Unless and until you inform us differently in your forgiveness application or otherwise, we will assume that your Covered Period is 24 weeks.

Owner income replacement forgiveness is based on your 2019 or 2020 Schedule C Line 31 Net Profit (whichever year was used to determine your loan amount).

If you are not including any payroll or nonpayroll costs besides owner income replacement in your forgiveness calculation, then using a 24-week Covered Period would maximize your possible forgiveness. Please keep in mind that the Schedule C used at origination will also be used as the basis for forgiveness.

You may apply for forgiveness until your loan matures. See also Question 18: "When do I start making monthly loan payments?” If you are unsure of your loan maturity, please reach out to your account officer using the contact information listed in the application portal.

If you apply for forgiveness within 10 months after the end of a maximum 24-week Covered Period, you will not be required to make any payments until after SBA pays MidFirst the amount of your forgiveness. If you have a remaining balance after forgiveness, MidFirst will notify you of your remaining balance, date of first payment and monthly payment amount.

If you do not apply for forgiveness within 10 months after the end of your Covered Period, then we will send you a bill for your first monthly payment. You may still apply for forgiveness after you begin to make monthly payments.

Payroll costs that are paid or incurred during the Covered Period are eligible for forgiveness.

Payroll costs are considered paid on the day that paychecks are distributed or the Borrower originates an ACH credit transaction.

Payroll costs are considered incurred on the day that the employee’s pay is earned. Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period are eligible for forgiveness if actually paid on or before the next regular payroll date.

Nonpayroll costs that are paid or incurred during the Covered Period are eligible for forgiveness.

Incurred nonpayroll costs are nonpayroll costs that were incurred during the Covered Period but paid after the Covered Period on or before the next regular billing date (even if the billing date is after the Covered Period).

Eligible nonpayroll costs include lease expenses, mortgage interest, utility expenses, covered operating expenditures for business software and cloud computing services, covered property damage costs, covered supplier costs, and covered worker protection expenditures.

Economic Injury Disaster Loans (EIDLs) are loans provided directly to businesses from SBA – not from banks. Businesses that applied for EIDLs could also request an EIDL advance of up to $10,000, whether or not the business was eventually approved for the EIDL. If a business received an EIDL advance (up to $10,000), the business does not have to repay SBA that amount.

The CARES Act originally required the SBA to reduce PPP loan forgiveness by the amount of an EIDL Advance a PPP borrower received from SBA. However, the Flexibility Act (signed into law December 2020) removed this requirement. EIDL Advances no longer reduce PPP loan forgiveness, and customers whose forgiveness had already been reduced by an EIDL Advance will receive a refund with interest once SBA pays MidFirst this amount.

Read more about EIDL advances here.

As long as your PPP loan is outstanding, your business may not undergo a Change of Control without lender or SBA consent. SBA has outlined very specific rules for lenders to follow in granting this consent. Please contact your account officer who can walk you through this process.

Most applicants may either compare the year 2020 to the year 2019 (using annual federal tax returns), or may compare a quarter in 2020 to the same quarter in 2019.

If your business was not operating during all four quarters of 2019, please see Question 3 in SBA’s guidance here to determine which quarters you should compare.

Note: SBA has implemented a COVID Revenue Reduction Score which will be used in lieu of gross receipts documentation for most (but not all) customers. MidFirst’s online forgiveness portal will indicate whether or not each customer must calculate their gross receipts reduction.

See Question 4: “What is the forgiveness process for PPP loans $150,000 or less?”

For those customers who must calculate their gross receipts reduction, please see Question 1 and Question 5 in SBA’s guidance here.

Note: SBA has implemented a COVID Revenue Reduction Score which will be used in lieu of gross receipts documentation for most (but not all) customers. MidFirst’s online forgiveness portal will indicate whether or not each customer must provide gross receipts documentation.

See Question 4: “What is the forgiveness process for PPP loans $150,000 or less?”

For customers who must provide gross receipts documents:

Customers who use an annual reference period must provide annual IRS income tax returns for 2019 and 2020. If the entity has not yet filed a tax return for 2020, the Applicant must fill out the return forms, compute the relevant gross receipts, and sign and date the return, attesting that the values that enter into the gross receipts computation are the same values that will be filed on the entity’s tax return.

Customers who use a quarterly reference period must provide one of the following sets of documents:

• Quarterly financial statements for the entity for each period. If the financial statements are not audited, the Applicant must sign and date the first page of the financial statement and initial all other pages, attesting to their accuracy. If the financial statements do not specifically identify the line item(s) that constitute gross receipts, the Applicant must annotate which line item(s) constitute gross receipts.
• Quarterly or monthly bank statements for the entity showing deposits from the relevant quarters. The Applicant must annotate, if it is not clear, which deposits listed on the bank statement constitute gross receipts (e.g., payments for purchases of goods and services) and which do not (e.g., capital infusions).