VCC is now accepting PPP Loan Forgiveness Applications.
Virginia Community Capital (VCC) is here to help you understand Paycheck Protection Program (PPP) loan forgiveness eligibility requirements and get the process started. The information below is based on current PPP Forgiveness Guidelines and they are subject to change.
Regarding new PPP funding (December 2020):
Congress has settled on a new COVID-19 relief package, including additional aid for small businesses through the Paycheck Protection Program. Lenders have not yet received all of the guidelines around the new relief funding. Once guidelines are released, VCC will notify our partners and share how to apply for funding. Please direct any questions to firstname.lastname@example.org and stay tuned to our PPP resource page for more information.
Please note: Where there is money, there are scammers. Paycheck Protection Program (PPP) borrowers should be aware of the fraudsters attempting to take advantage of the pandemic and the hundreds of thousands of small businesses that received these loans. VCC does communicate via email to our PPP borrowers, and most recipients will know the message is from our team or their lender. Still, if you have questions, never hesitate to reach out to us at (804) 344-5484 or email@example.com.
Virginia Community Capital’s Small Business Lending Team prepared this short video providing tips for borrowers completing the PPP loan forgiveness application.
This free webinar was presented in partnership by Virginia Community Capital, the U.S. Small Business Administration, and the Small Business Development Center Network. Click the button below to watch the recording.
- Matthew Ho, Assistant Vice President, Small Business Loan Officer - Virginia Community Capital
- Carl Knoblock, District Director - Virginia Small Business Administration (SBA)
- Timm Johnson, Director - Mason Small Business Development Center (SBDC)
- Mike Austin, Access to Capital Specialist - Hampton Roads Small Business Development Center (SBDC)
How does PPP loan forgiveness work?
First, it is important to review how PPP loans can be used. Acceptable uses of PPP loan proceeds include:
- Payroll costs (as defined in the CARES Act)
- Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums
- Mortgage interest payments (but not mortgage prepayments or principal payments)
- Rent payments
- Utility payments
- Interest payments on any other debt obligations that were incurred before February 15, 2020; and/or refinancing an SBA EIDL loan made between January 31, 2020, and April 3, 2020
Both nonprofit and for-profit PPP loan recipients may be eligible for loan forgiveness, including the full principal amount of the loan and any accrued interest if certain criteria are met. The amount of loan forgiveness will depend, in part, on the total amount spent over the covered period on the costs listed above. Additional guidelines can be found here.
Flexibility for Forgiveness
In early June 2020, the Paycheck Protection Program Flexibility Act (PPPFA) was signed into law. On June 10, 2020, the Small Business Administration and Treasury Department released an interim final rule to reflect changes made by the PPPFA (H.R. 7010). This rule codified several program changes:
- Confirms that borrowers who use less than 60 percent of their PPP loan amount for payroll costs during the covered period for forgiveness still will be eligible for partial loan forgiveness.
- Extends the end date of the “covered period” for a PPP loan from June 30, 2020, to Dec. 31, 2020.
- Provides a five-year maturity for loans made on or after June 5, 2020, and provides an option for loans made prior to that date to extend maturity from two years to five years at the mutual agreement of the borrower and lender.
- Extends the loan forgiveness period from eight weeks to 24 weeks. (For loans made prior to June 5, 2020, borrowers may opt to keep the forgiveness period at eight weeks.)
- Clarifies that if a borrower submits its forgiveness application within 10 months of the end of the loan forgiveness period, the borrower will not have to make any payments on the loan before the date SBA remits the forgiven amount to the lender.
- Reiterates that the last day a lender can obtain an SBA loan number for a PPP loan is June 30, 2020.
SBA also released a three-page “EZ” Paycheck Protection Program loan forgiveness application requiring less documentation and fewer calculations than previously required. Form 3508EZ applies to borrowers who meet any one of these three criteria:
- Applied for the PPP loan as self-employed, an independent contractor, or a sole proprietor with no employees.
- Did not reduce salary or wages for any employee by more than 25%, and did not reduce the number of hours of their employees (excepting laid-off employees who refused an offer to return).
- Did not reduce salary or wages for any employee by more than 25% during the covered period and experienced reductions in business activity as a result of health directives related to COVID-19.
Where do I start?
If you submitted a forgiveness application package prior to 8/13/20, please resubmit your package per the guidelines below.
Similar to our PPP application process, VCC will require all of our PPP borrowers to submit a complete document package. A complete package includes:
- Signed Form 3508 or Form 3508EZ (including the representations and certifications and Schedule A, if filling out Form 3508). Acceptable applications can be found on VCC’s website, SBA’s website, or the free application calculator through Reliant Business Valuation. (Any other SBA-compliant form is also acceptable.)
- Borrowers who received a PPP loan of $50,000 or less can use Form 3508S.
- Signed and checked VCC Bank checklist of supporting documents
- All required supporting documentation pertaining to your small business
Please note: The new relief bill signed by the president on December 27, 2020, implemented a simpler PPP forgiveness process for loans of $150,000 or less. VCC has paused processing any new forgiveness packages for loans of $150,000 or less until the new form and process are released.
Please send all loan forgiveness packages and questions to PPPfirstname.lastname@example.org.
If you need one-on-one technical assistance in completing the application or you have additional questions regarding PPP forgiveness, we recommend you contact your local Small Business Development Center to set up an appointment.
Please note: The SBA puts the onus on the Borrower to determine eligible use of proceeds, and to document them accordingly. For this reason, VCC is only able to direct the Borrower to guidelines issued by the SBA.
PPP Loan Forgiveness Resources
NOTE: Please download and save documents prior to filling them out and signing. This applies to the following: 3508, 3508EZ, and VCC PPP Forgiveness Checklist.
- PPP Deferment Notice to Borrowers
- Additional Revisions to Loan Forgiveness and Loan Review Procedures Interim Final Rules
- VCC PPP Forgiveness Documentation Checklist
- U.S. Department of the Treasury CARES Act – Assistance to Small Businesses
- SBA Treatment of Owners and Forgiveness of Certain Nonpayroll Costs
- SBA Revisions to the Third and Sixth Interim Final Rules
- Appeals of SBA Loan Review Decisions Under the Paycheck Protection Program
- SBA-Issued PPP Loan Forgiveness FAQs
- PPP Client Forgiveness FAQ
- Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review Procedures Interim Final Rule
- Reliant PPP Loan Forgiveness Application Calculator
- SBA PPP Loan Forgiveness Guidelines