Organizations that obtained Paycheck Protection Program funding through the CARES Act can have their loans forgiven, turning them into grants. To qualify, each borrower must file a forgiveness application with its PPP lender, proving that it followed the rules. If your church, school, college, or camp meets all the criteria, 100% of its loan can be forgiven.
The process of seeking PPP loan forgiveness has been complicated by evolving guidance and ongoing changes to the rules. It can be hard to know where to start. We’ve compiled the following steps to help your church, school, or nonprofit ministry apply for PPP loan forgiveness.
Note: The $900 billion relief package Congress passed in December 2020 changed several provisions of the PPP loan program. We are expecting to hear additional information from the U.S. Small Business Administration as it implements these changes. Stay tuned. For information about the latest stimulus package, read COVID-19 Relief Act, Round Two Highlights.
You’ll need the following information in order to complete the PPP loan forgiveness application. Your lender may require additional documentation.
These documents must be submitted with the PPP loan forgiveness application. The program requires your ministry to keep additional records on file. For details, see the SBA’s PPP Loan Forgiveness Application Instructions for Borrowers.
Before completing a PPP loan forgiveness application, we strongly urge you to contact your PPP lender. Some banks and credit unions have developed their own software to process loan forgiveness applications. If your lender is among them, it may not accept a paper version of the application or another organization’s loan forgiveness software tool.
Contact the lender that issued your ministry’s PPP loan. Ask:
We encourage you to check with a trusted local bank, financial advisor, or auditor if you’re unsure about how to answer any questions that arise while preparing to seek PPP loan forgiveness. They would be best suited to meet your ministry’s unique needs.
Loans can be fully forgiven if at least 60% of the funds were used for payroll costs, and the remaining amount was spent on qualified expenses such as mortgage, rent, and utility expenses.
During the period covered by the loan, did you:
If you answered “Yes” to all of the questions above, your ministry should qualify for full forgiveness. You can use the SBA’s simple loan forgiveness application: 3508EZ.
If you answered “no” to any of the questions above, your ministry may need to repay some portion of its PPP loan. It can be complicated to determine the exact amount that must be repaid. In addition to talking with a financial advisor, you could also:
The SBA was to begin processing loan forgiveness applications in early August. Banks were expected to start accepting loan forgiveness applications soon afterward. Verify that your lender will accept the loan forgiveness application that you intend to complete, if it differs from the SBA or lender’s version. Complete the application, attach all required documentation, and submit it to your lender.
Brotherhood Mutual is not a financial lender and does not broker loans, make loans, provide loan forgiveness, or make any credit decisions. Nothing on this website is an offer or a solicitation for a loan. This website is not an agent, representative, or broker of any lender. The information on this page does not constitute legal advice.
You are encouraged to consult a trusted financial advisor, lender, or accountant if you have questions or need assistance with seeking PPP loan forgiveness.