Paycheck Protection Program

The following expenses are eligible for forgiveness:

• Payroll costs (as described in the Interim Final Rule 1), including compensation to owners (as described in Interim Final Rule 3) that are paid or incurred during the Covered Period or Alternative Payroll Covered Period.
  • Payroll costs incurred but not paid during the Borrower’s last pay date of the Covered Period or the Alternative Payroll Covered Period are eligible for forgiveness if paid on or before the next regular payroll date or Alternative Payroll Covered Period.
  • Payroll costs that were both paid and incurred can only be counted once toward the forgiveness amount
• Non-Payroll costs paid or incurred during the Covered Period.  Non-payroll costs incurred during the Covered Period must be paid on or before the next regular billing date, even if the billing date is after the Covered Period. Non-payroll costs may not exceed 40% of the loan forgiveness request. The following non-payroll costs are eligible for forgiveness:
  • Interest payments on business mortgage obligations (not including the pre-payment of interest or any payment of principal) entered into before February 15, 2020
  • Business rent/lease payments (on real or personal property) if the lease was entered into before February 15, 2020
  • Business utility payments (e.g., electricity, gas, water, transportation, telephone, internet access) if the service began before February 15, 2020

What is the Covered Period?

The default Covered Period runs for 24 weeks (or until December 31, 2020 if it occurs before the end of this 24-week period), starting on the date the loan was funded.^[1]

Borrowers who received their loans prior to June 5, 2020 may alternatively elect an 8-week Covered Period (starting on the date the loan was funded). If eligible, you may elect to apply for forgiveness before the end of the 24-week period, however, all costs you claim must be paid or incurred during the timeframe you elect.

Is there anything I have to do in order to extend my Covered Period to 24 weeks?

No, your Covered Period will automatically extend to 24 weeks unless you indicate otherwise in your Forgiveness Application

The Alternative Payroll Covered Period:

The Alternative Covered Period can be used for administrative convenience for Borrowers with a biweekly (or more frequent) payroll schedule. Borrowers may elect to calculate payroll costs using a date that began on the first day of the payroll period following their PPP loan funding date.

The SBA’s “EZ” form will allow certain borrowers to use a streamlined forgiveness application, including reduced documentation requirements.  Borrowers can apply for forgiveness using this form if one of the following is applicable:

• You are a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of your PPP loan application and you did not include any employee salaries in the computation of average monthly payroll.
• You did not reduce annual salary or hourly wages of any employee by more than 25% AND did not reduce the number of full-time equivalent (FTE) employees (or the average paid hours of employees).
• You did not reduce annual salary or hourly wages of any employee by more than 25% AND were unable to operate at pre-COVID-19 levels of business activity during the covered period due to compliance with government standards of sanitation, social distancing, or any other safety requirement related to COVID-19.

You will not have to obtain these numbers. PNC will automatically pre-populate borrowers’ Forgiveness Applications with their SBA PPP Loan Number and Lender PPP Loan Number in the digital portal.

You can reference the revised SBA Loan Forgiveness Application and Instructions and the new SBA Loan Forgiveness Form EZ and Instructions on the Treasury site.

In general, payroll documentation, full-time equivalent (FTE) headcount documentation, and non-payroll documentation will be required.

Up to 100% of the principal amount and any accrued interest of the loan may be forgiven if you use the proceeds on qualifying expenses. However, there are certain actions that may reduce the amount of forgiveness, such as reducing the number of employees or reducing employee salaries or wages. Only up to 40% of the forgiven loan amount can be for non-payroll costs.

PNC will alert borrowers with an email notification once the PNC digital application portal is available to accept applications. You will be notified once the PNC Online Portal becomes available. Borrowers will be provided login credentials and instructions on how to initiate the loan forgiveness process through PNC’s digital portal.

No. You may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from loan origination.

However, if you do not apply for loan forgiveness within 10 months after the last day of your loan forgiveness Covered Period, loan payments are no longer deferred, and you must begin making payments on the loan. For example, if a borrower’s covered period ends on October 30, 2020, the borrower has until August 30, 2021 to apply for forgiveness before loan repayment begins.

The expiration date in the upper-right corner of the posted PPP loan forgiveness application forms is displayed for purposes of SBA’s compliance with the Paperwork Reduction Act and reflects the temporary expiration date for approved use of the forms. This date will be extended, and when approved, the same forms with the new expiration date will be posted

PNC will notify you once we are able to accept your application through our Portal. Please note that even if you haven’t applied for forgiveness, no payments are due until the end of your deferral period, which is 10 months after the end of your covered period (or 10 months after the end of 2020, whichever occurs first). Once you apply for forgiveness, payments on any unforgiven portion of your loan will be due in the first month after the SBA remits a forgiveness payment to PNC.

Reach out to your Business Banker or Relationship Manager prior to the closing of any covered change in ownership. Covered change of ownership occurs when:

• The common stock or other ownership interest in the PPP Borrower is being sold or otherwise transferred,
• When the borrower sells or transfers at least 50% of its assets, or
• When the borrower merges with or into another entity.

Outstanding loan amounts bear an interest rate of 1.00%. Any loan approved on or after June 5, 2020 will have a maturity of five years, and any loan approved before June 5, 2020 will have a maturity of two years, unless the borrower and PNC agree to extend the period to five years. At the end of the deferral period, any accrued interest that has not been forgiven will be due.

If you apply for forgiveness, your payments will be deferred until PNC receives your approved loan forgiveness funds from the SBA. If you don’t apply for forgiveness, your payments could be deferred for up to 16 months – the deferral period has been extended for 10 months following whichever date occurs first – the date that is 24 weeks after your loan was funded, or December 31, 2020.  Monthly payments of principal plus interest will begin after the deferral period.

No.  PNC will let borrowers know when our digital portal is ready to accept forgiveness applications. We are not accepting paper applications at this time.

Guidance from the SBA states that lenders have 60 days after receiving a complete forgiveness application to review a PPP Forgiveness application and submit the lender’s decision to the SBA. Once the SBA receives the lender’s decision, they have 90 days to review the application before remitting a forgiveness payment to the lender.

Yes.

If you apply for forgiveness, payments are deferred until the time when SBA remits payment to PNC. If there is a remaining balance after SBA remits payment, your first payment will be due the following month. If you do not apply for forgiveness, your first payment will be due 10 months after the end of the 24-week covered period (or 10 months after December 31, 2020, whichever is earlier). Refer to your loan documents for more information about deferral periods and repayment. Additionally, PNC will notify you of your first payment due date.

Within 30 days of this notice, you may request that the SBA review this decision by contacting an SBA Call Center Representative at 833-572-0502, or the local SBA Field Office; the list of offices can be found at https://www.sba.gov/tools/local-assistance/districtoffices. Please note that you are required to make your monthly payments unless the SBA reverses our decision.

Yes.

In calculating your loan forgiveness amount, you may exclude any reduction in full time employees if you are able to document in good faith the following: (1) an inability to rehire individuals who were employees of the borrower on February 15, 2020 and (2) an inability to hire similarly qualified individuals for unfilled positions on or before December 31, 2020. The documents that you should maintain to show compliance with this exemption include the written offer to rehire an individual, a written record of the offer’s rejection, and a written record of efforts to hire a similarly qualified individual. These documents must be sent to the applicable state’s unemployment insurance office within 30 days of the employee’s rejection of the rehire.

Payroll costs that were either paid or incurred during the Covered Period are likely 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 paid on or before the next regular payroll date. Payroll costs that were both paid and incurred can only be counted once toward the forgiveness amount.

New Assistance for Employees and Tax Benefits for your Business
FAQs provided by the US Treasury
Table of Small Business Size Standards
SBA EIDL Website
FAQS for Loan Forgiveness Provided by the SBA
Summary of PPP lending as of 7/31/20
Interim Final Rule - Appeals of SBA Loan Review Decisions Under the PPP
SBA Loan Forgiveness Application (Standard)
SBA Loan Forgiveness Application Instructions (Standard)
SBA Loan Forgiveness Form EZ
SBA Loan Forgiveness Form EZ Instructions
Interim Final Rule on Loan Forgiveness
Interim Final Rule on SBA Loan Review Procedures and Related Borrower and Lender Responsibilities
Interim Final Rule on Revisions to the Third and Sixth Interim Final Rules
Interim Final Rule on Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review Procedures Interim Final Rule