Paycheck Protection Program Loan Forgiveness Frequently Asked Questions | Wells Fargo

Paycheck Protection Program (PPP) Loan Forgiveness
Frequently Asked Questions

                    Print

The information contained in this page is based on laws, rules, regulations, and related guidance with respect to the Paycheck Protection Program (PPP), including guidance issued by the U.S. Small Business Administration (SBA) on August 24, 2020. We will periodically update this information, so please check back often and consider bookmarking this page. In the event of any discrepancies between the information on this site and the SBA’s site, please follow official SBA guidance.

About the PPP loan and loan forgiveness

What are the terms of the loan and are there any fees?

The term or period of the PPP loan is stated in your promissory note. The loan term is either two or five years from the date you received your SBA PPP loan guarantee number. 

The PPP loan will accrue interest at an annual rate of 1%.

No payment is due during the deferral period, which ends:

  1. On the date when the SBA makes a decision on your application for forgiveness, or;
  2. 10 months after the last day of the covered period, if you have not applied for forgiveness.

If your loan is forgiven, any interest accrued during the deferral period is eligible for forgiveness.

There is no penalty for loan pre-payment, however partial or full pre-payment may impact forgiveness.

After the deferral period, any balance that is not forgiven (including any accrued interest on the unforgiven portion) will become a term loan with monthly payments due up to the maturity date and with an annual interest rate of 1%.

For each payment of principal, interest, and/or fees that has not been paid in full within 15 (fifteen) days after its due date, you will be assessed a late charge of $15 or five percent (5%) of the amount due, whichever is greater.

There are no annual or documentation fees associated with the loan. However, if you are late on payments after the deferral period, you may be liable for late fees for any portion of the loan that is not forgiven.

You will receive a loan statement before any payment is due, so you can plan accordingly.

Please refer to the SBA site for more details on the covered period, the term of the loan and other loan forgiveness details.

What is the deferral period?

Your deferral period ends: 

  1. On the date when the SBA makes a decision on your application for forgiveness, or;
  2. 10 months after the last day of the covered period, if you have not applied for forgiveness.

No payment of PPP loan principal, interest, and fees is due during the deferral period. 

If you received your promissory note before June 5, 2020, it may indicate that your first payment is due 6 months from the date of the note. The PPP Flexibility Act (signed on June 5, 2020) extended the deferral period, so you can disregard the original 6 month period referenced in the promissory note.

You will receive a loan statement before any payment is due, so you can plan accordingly.

How does an Economic Injury Disaster Loan (EIDL) affect loan forgiveness?


Economic Injury Disaster Loans (EIDL) are direct loans, while EIDL advances are grants. The SBA set the maximum EIDL advance at $10,000. If you received an EIDL advance, the SBA will automatically deduct the amount of any EIDL advance you received from the final PPP loan forgiveness amount. Make sure to list the amount of any EIDL advance on the loan forgiveness application, where it is requested, but the deduction from loan forgiveness should not be reflected in the loan forgiveness application calculations.

You must repay any remaining balance on the PPP loan after loan forgiveness, which will include the amount of EIDL advance.  

For example, if you had a PPP loan for $50,000, an EIDL advance of $10,000, and are approved for 100% PPP loan forgiveness, the adjusted PPP loan forgiveness amount would be $40,000. You owe the remaining $10,000 as part of the PPP loan, and this balance will become a term loan with Wells Fargo. The term or period of the PPP loan is stated in your promissory note and is either two or five years from the date of your note. If your PPP loan was made on or after June 5, 2020, then your loan term is five years. The loan will accrue interest at an annual rate of 1%.

Are PPP loans eligible for loan forgiveness?

PPP loans, in whole or in part, are eligible for loan forgiveness if funds were used for certain eligible business expenses. If part of the loan is not forgiven, you will be responsible to repay the amount not forgiven plus any accrued interest.

How does a change in ownership affect my PPP loan or loan forgiveness?

Any change in ownership requires prior approval. Please contact us prior to any change in ownership of your business. For Wells Fargo Business Online® or a Wealth & Investment Management customer, please call 1-844-304-8911. If you are a Commercial Electronic Office® (CEO®) customer, please contact your relationship manager for assistance.

Eligible expenses (payroll and nonpayroll)

What business expenses qualify for loan forgiveness?

To qualify for loan forgiveness, the funds must be used for eligible costs incurred or paid during a 24-week (168 day) covered period (ending December 31, 2020, at the latest); if you received your loan before June 5, 2020, then you can choose an 8-week (56 day) or 24-week (168 day) covered period. Costs include:

  • Eligible payroll costs, including compensation to owners and employee benefits
  • Interest payments on business mortgage obligations on real or personal property, where the mortgage originated before February 15, 2020, (but not any payment of principal or prepayment of interest)
  • Business rent or lease payments for real or personal property, where the rent or lease agreement was in force before February 15, 2020
  • Business utility payments for a service such as electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020

At least 60% of your total forgivable amount must be used for allowable payroll costs.

What is the covered period or alternative payroll covered period?

The covered period or alternative payroll covered period is the period in which loan funds must be used to qualify for loan forgiveness. Funds must be used for eligible costs incurred or paid during a 24-week (168 day) covered period (ending December 31, 2020, at the latest); if you received your loan before June 5, 2020, then you can choose an 8-week (56 day) or 24-week (168 day) covered period. 

You can seek forgiveness for payroll costs for the covered period based on either of the following, at your election:

  • Covered period: The period that begins on the date you received the PPP loan proceeds; or
  • Alternative payroll covered period: If you have a biweekly or more frequent payroll schedule, the period that begins on the first day of the first pay period after you received the PPP loan proceeds.

Payroll costs for the covered period must be paid or incurred during the period to be eligible. If payroll costs are incurred during the last pay period within the covered period selected, but paid after the end of the covered period selected (but on or before the next regular payroll date), these payroll costs will still be eligible for forgiveness. (For example, this may happen when your pay cycle ended on the payday of Friday, October 2, but the covered period selected ended on October 1.)

Which types of payroll costs are eligible for loan forgiveness?

Eligible payroll costs include the following, if paid or incurred during the covered period or the alternative payroll covered period:

  • Gross salary, gross wages, gross tips, gross commissions, paid leave (vacation, family, medical or sick leave, not including leave covered by the Families First Coronavirus Response Act), and allowances for dismissal or separation;
  • Payments for employer contributions for employee health insurance, including employer contributions to a self-insured, employer-sponsored group health plan, but excluding any pre-tax or after-tax contributions by employees;
  • Payments for employer contributions to employee retirement plans, excluding any pre-tax or after-tax contributions by employees;
  • Payments for employer state and local taxes assessed on employee compensation (such as state unemployment insurance tax), excluding any taxes withheld from employee earnings;
  • Payroll costs may include bonus and hazard pay, and may include salaries paid to furloughed employees.

Limitations for individual employees

The total amount of cash compensation eligible for forgiveness may not exceed a pro-rated annual salary of $100,000. This means the maximum you can claim for cash compensation is $46,154 for any individual employee during the 24-week covered period selected (or $15,385 if you select the 8-week period). 

If you apply before the end of the covered period, the maximum will be prorated.  This means if you apply after the 16th week (as an example), the maximum you can claim for cash compensation for any individual employee will be $100,000/52 x 16 weeks = $30,769. 

Eligible payroll costs are limited to employees whose principal place of residence is the United States. Payments to independent contractors are not eligible.

Limitations for owner-employees, self-employed, and general partners 

Compensation for owner-employees, self-employed individuals and general partners are also eligible for loan forgiveness based on certain PPP compensation formulas, and based on their business type. 

For PPP, an owner-employee is defined as an owner who is also an employee (including where the owner is the only employee). Owner-employees with a less than 5% ownership stake in a C-corps or S-corps are not subject to the owner-employee compensation limitation. 

Owner compensation falls under “Payroll costs”, and for the 24-week covered period it is capped at the lesser of 2.5 months of $100,000 annualized ($20,833) or 2.5 months of 2019 compensation across all businesses in which they have an ownership stake. For an 8-week covered period, this amount is capped at $15,385, which is the 8-week equivalent of $100,000. The PPP compensation formulas varies based on business type, as explained: 

For self-employed individuals

If filing IRS 1040 Schedule C (or Schedule F), forgiveness for the amount paid in 2020 is capped at 2.5 times the monthly 2019 net profit/loss as shown on Schedule C, line 31 (or Schedule F, line 34). Note that if your 2019 net profit was a net loss, the forgiveness amount will be zero. 

If you are self-employed and filed an IRS Form 1040 Schedule C (or Schedule F), and did not submit a 2019 IRS Form 1040 Schedule C (or Schedule F) when you initially applied for the PPP loan, you will need to include it with your forgiveness application. 

For general partners

Forgiveness is capped at 2.5 months x the monthly 2019 self-employment earnings as shown on IRS 1065 Schedule K-1 line 14a (reduced by Sec. 179 deduction, unreimbursed partnership expenses, and depletion from oil and gas properties) and multiplied by 0.9235, subject to a maximum of $20,833 per owner for a 24-week covered period or $15,385 for an 8-week period. Only compensation paid during the covered period or alternative payroll covered period is eligible for loan forgiveness. Documentation of such payments do not need to be provided to the lender. 

No additional forgiveness is available for retirement or health insurance contributions for self-employed individuals or general partners. 

If you are in a general partnership and did not submit 2019 IRS Form 1065 K-1s when you initially applied for the PPP loan, you will need to include it with your forgiveness application. 

For owner-employees of S-corps

The employee cash compensation of an S-corp owner-employee, defined as an owner who is also an employee, is also eligible for loan forgiveness up to a maximum of 2.5 months x their monthly 2019 employee cash compensation. As explained previously, for a 24-week covered period the maximum forgiveness is $20,833 per owner, and for an 8-week period the maximum is $15,385. 

You can also claim forgiveness for payments for employer state and local taxes paid by the borrower and assessed on the owner-employee’s compensation, and for employer retirement contributions to owner-employee retirement plan capped at the amount of 2.5x their monthly 2019 employer retirement contribution. 

These eligible non-cash compensation payments should be included on lines 7 and 8 of PPP Schedule A of Form 3508 or line 1 of Form 3508EZ, and do not count toward the $20,833 cap per individual owner. 

Employer contributions for health insurance are not eligible for additional forgiveness for S-corp employees having at least a 2% stake in the business. 

To claim forgiveness, you must submit payroll documents detailing cash compensation paid to owner-employee(s) during the covered period selected, up to the eligible amount stated previously. Payments other than for cash compensation should be included on lines 6 through 8 of PPP Schedule A of the loan forgiveness application and do not count toward the $20,833 cap per individual. 

For owner-employees of C-corps

The employee cash compensation of a C-corp owner-employee, defined as an owner who is also an employee, is eligible for loan forgiveness up a maximum of 2.5 x their monthly 2019 employee cash compensation. For a 24-week covered period the maximum forgiveness is $20,833 per owner, and for an 8-week period the maximum is $15,385.

You can also claim forgiveness for payments for employer state and local taxes paid by the borrower and assessed on owner-employee compensation, for the amount paid by the borrower for employer contributions for owner-employee health insurance, and for employer retirement contributions to owner-employee retirement plan capped at the amount of 2.5x their monthly 2019 employer retirement contribution. 

To claim forgiveness, you must submit payroll documents detailing cash compensation paid to owner-employee(s) during the covered period selected, up to the eligible amount stated previously. Payments other than for cash compensation should be included on lines 6 through 8 of PPP Schedule A of Form 3508 or line 1 of Form 3508EZ, and do not count toward the $20,833 cap per individual. 

In all cases

Owner compensation for the 24-week covered period is capped $20,833 (not to exceed 2.5 months of 2019 compensation) across all businesses in which they have an ownership stake. Note that owner-employees with less than 5% ownership stake in C-or S-corps are not subject to these caps, but are still subject to the general employee limitation of $46,154 per employee during the 24-week covered period.

Are health care and retirement benefits paid by the employer eligible costs for loan forgiveness?

For employees

Health care and retirement benefits paid or incurred during the covered period (or alternative payroll covered period) are eligible for forgiveness as payroll costs. Expenses paid by employees for such benefits are not eligible for forgiveness. Expenses for future periods that are accelerated into the covered period (or alternative payroll covered period) are also not eligible for forgiveness.

For self-employed individuals and general partners

Employer health insurance contributions and employer retirement contributions made on behalf of self-employed individuals or general partners are not eligible expenses.

For owner-employees of an S-corps

Employer health insurance contributions are not included for owners (and their family members) having at least a 2% stake of an S-corp. Employer retirement contributions made on behalf of an owner-employee of an S-corp are eligible and do not count toward the cash compensation cap of $20,833 per individual, and are capped at the amount of 2.5x their monthly 2019 employer retirement contribution.

For owner-employees of a C-corps

Employer health insurance contributions and retirement contributions are eligible expenses. Retirement costs are capped at 2.5 x monthly 2019 employer retirement contribution. These payments do not count toward the $20,833 cap per individual.

Can I use PPP fund to pay employees who are not currently able to work due to business being closed or for any other reason?

Yes.

If you are not able to operate or are operating at a limited capacity when the PPP loan proceeds are received, you may choose to pay employees who are not able to work. This may help you maximize loan forgiveness, as current SBA guidance states that at least 60% of loan forgiveness must be attributable to payroll costs.

Are there caps or exclusions from the definition of payroll costs or owner compensation?

You must exclude the following:

  • Compensation to an employee whose principal place of residence is outside of the United States
  • Compensation to an independent contractor (1099). Independent contractors do not count as employees within PPP.
  • Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (FFCRA) (Public Law 116–127)

Also, the compensation of any individual employee is capped at an annual salary of $100,000, which translates to $46,154 per employee during a 24-week covered period or $15,385 per employee during an 8-week covered period.

For a 24-week covered period, the maximum amount of loan forgiveness you can claim as compensation for owner-employees, self-employed individuals and general partners is the lower of 2.5 months of compensation earned in 2019 or $20,833, which is the 2.5-month equivalent of $100,000 per year. If you elect an 8-week covered period, the maximum is set at $15,385, which is the 8-week equivalent of $100,000. 

For other limitations, please see what types of payroll costs are eligible for loan forgiveness.

Remember, in order to be eligible for 100% loan forgiveness, at least 60% of the PPP loan must be used for eligible payroll costs.

If you apply early, before the end of the covered period, the same pro-rated maximum applies. This means if you apply after the 16th week (as an example), the maximum you can claim for cash compensation for any individual employee will be $100,000/52 x 16 weeks = $30,769.

What type of nonpayroll costs are eligible for loan forgiveness?

Eligible nonpayroll costs include:

  • Interest payments on business mortgage obligations on real or personal property, where the mortgage originated before February 15, 2020, (but not any payment of principal or prepayment of interest)
  • Business rent or lease payments for real or personal property, where the rent or lease agreement was in force before February 15, 2020
  • Business utility payments for a service such as electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020

To be eligible, nonpayroll costs must be paid during the covered period, or incurred during the covered period and paid on or before the next regular billing date, even if the billing date is after the covered period. (For nonpayroll costs, you must use the covered period and not the alternative covered period.)

Self-employed individuals must have claimed or be entitled to claim a deduction for these nonpayroll expenses on your Form 1040 Schedule C (or Schedule F) in order to claim them as expenses eligible for loan forgiveness.

Potential reductions in loan forgiveness and details on Safe Harbor

Are there possible reductions to my PPP loan forgiveness amount?

Forgiveness is based in part on maintaining employees and maintaining wages paid, or rehiring and reinstating employee wage levels, if previously reduced. To maximize forgiveness, you may choose to rehire and restore wages sooner to increase eligible payroll costs that fall into the covered period. 

If you had a reduction in full-time equivalency (FTE) or wage level, your forgiveness amount may be reduced. You may be exempt from these reductions if you restored FTE and wage levels no later than December 31, 2020. These two types of reductions and exemptions, including Safe Harbors are explained in the Safe Harbor FAQ.

You may also be exempt from these reductions if you can document that you are not able to rehire employees or hire replacement employees for unfilled positions or cannot return to normal business activities because of COVID related safety requirements.

How do I determine if I have had an FTE reduction?

Loan forgiveness may be reduced if the number of average weekly FTE employees during the covered period (or the alternative payroll covered period) was less than during the FTE reduction reference period selected.  

You can select a reference period of either: 

  • February 15, 2019 to June 30, 2019; or 
  • January 1, 2020 to February 29, 2020; or 
  • For seasonal employers, either of the preceding periods or a consecutive 12-week period between May 1, 2019 and September 15, 2019

You are exempt from such a reduction if the FTE Reduction Safe Harbor applies. Safe Harbors are explained in the Safe Harbor FAQ.

You may be exempt from these reductions if you restored FTE no later than December 31, 2020.

You may also be exempt from these reductions if you can document that you are not able to rehire employees or hire replacement employees for unfilled positions or cannot return to normal business activities because of COVID related safety requirements.

What does full-time equivalency (FTE) employee mean?

Full-time equivalency (FTE) employee generally means an employee who works 40 hours or more, on average, each week. For part-time employees who work less than 40 hours, calculate their FTE as a proportion of 40 hours. For example, if an employee worked 32 hours per week on average, the employee should be counted as 0.8 FTE. Alternatively, SBA offers a simplified method that assigns all part-time employee as 0.5, if that is preferable.

Only employees whose place of residence is in the United States should be included.

When counting FTE reductions, you will not be penalized for: 

  • A position for which you made a good-faith, written offer to rehire an employee during the covered period selected and the offer was rejected – subject to certain requirements
  • An employee who was fired for cause, voluntarily resigned, or voluntarily requested a reduction of their hours, during the covered period selected
  • A documented inability to rehire particular employees or hire replacement employees for unfilled positions
  • A documented inability to return to normal business activities because of COVID related safety requirements

In these cases, loan forgiveness will not be reduced.

How would an FTE reduction affect my PPP loan forgiveness?

In general, your loan forgiveness is reduced by the same percentage as the percentage reduction in FTE employees. This is calculated by comparing the average weekly FTE employees during the covered period (or the alternative payroll covered period) with the FTE reduction reference period selected. 

For example, if you had 10.0 FTE employees during the FTE reduction reference period and this declined to 8.0 FTE employees during the covered period, the percentage of FTE employees declined by 20%, and therefore only 80% of otherwise eligible expenses will be forgiven.

You are exempt from such a reduction if the FTE Reduction Safe Harbor applies. Safe Harbors are explained in the Safe Harbor FAQ

You may be exempt from these reductions if you restored FTE no later than December 31, 2020. These types of reductions and exemptions, including Safe Harbors are explained in the Safe Harbor FAQ.

You may also be exempt from these reductions if you can document that you are not able to rehire employees or hire replacement employees for unfilled positions, as explained in the Safe Harbor FAQ.

When calculating FTE reduction, you must include all employees (including those earning more than $100,000).

If you've terminated an employee during the covered period, your FTE count will be impacted if you don’t rehire them or don’t have an exemption reason. If an employee was terminated for cause, voluntarily resigned, or voluntarily requested a reduction of hours, you may count that employee at the same FTE level as before.

How will my average FTE be affected if I apply before the end of the 24-week covered period?

If you opt to apply for forgiveness before the end of the covered period, you should calculate average FTE based on the number of weeks between the loan disbursement up to the time you applied for forgiveness.

You may submit a loan forgiveness application before the end of the 8-week or 24-week covered period, if you have used all of the loan proceeds for which you are requesting forgiveness. To calculate the salary reduction penalty, you must account for any salary reductions in excess of 25 percent for the entire covered period.

How does the FTE Reduction Safe Harbor work?

The Safe Harbor exempts or protects you from the reduction in loan forgiveness due to decrease in FTE employee levels. You are exempt from the reduction in loan forgiveness if both of the following conditions are met:

  • You reduced FTE employee levels between February 15, 2020, and ending April 26, 2020; and 
  • You then restored FTE employee levels by no later than December 31, 2020

You may also be exempt from these reductions if you can document that you are not able to rehire employees or hire replacement employees for unfilled positions or cannot return to normal business activities because of COVID related safety requirements.

Will forgiveness be reduced if I laid-off or reduced the hours of an employee, but then offered to rehire the same employee for the same salary and same number of hours?

No. If you offered to rehire or offered to restore the employee’s hours at the same salary or wages, you will not have an FTE reduction for that employee.

In calculating your PPP loan forgiveness amount, you may exclude any reduction in FTE employee headcount attributable to a particular employee if:

  • You made a good faith, written offer to rehire or restore hours (as applicable) during the covered period or alternative payroll covered period;
  • The offer was for the same salary or wages and the same number of hours;
  • The offer was rejected;
  • You maintain records documenting the offer and rejection; and
  • You inform the state unemployment insurance office of the rejected offer within 30 days

You may also be exempt from these reductions if you can document that you are not able to rehire employees or hire replacement employees for unfilled positions or cannot return to normal business activities because of COVID related safety requirements.

If I had a reduction in employees’ salary or wages, or terminated an employee, how does that affect my PPP loan forgiveness?

Loan forgiveness may be reduced when there was a reduction in an employee’s salary or wages from January 1, 2020 to March 31, 2020, (the salary reduction reference period) in excess of 25%, unless an exception applies. There is a salary or hourly wage reduction safe harbor if you restored salary/wage levels by December 31, 2020.

For each person employed during the covered period selected, start with the employee’s average annual salary or hourly wage during the covered period selected, and calculate whether that employee had a reduction in excess of 25% compared to the salary reduction reference period. Do not count the salary reduction for employees who were already counted in the FTE reduction.

For more details on the salary reduction calculations, please refer to the directions on page 4 of Form 3508 Loan Forgiveness Application Instructions.

This salary reduction penalty does not apply for any employee who was paid more than an annualized equivalent of $100,000 in any pay period in 2019. 

In summary, if the average annual salary or hourly wage for each employee working during the covered period selected was at least 75% of their average annual salary or hourly wage in the salary reduction reference period, there is no salary/hourly wage reduction.

Will forgiveness be reduced if I restored an employee’s salary or wage reductions by December 31?

No. If certain employee salaries and wages were reduced between February 15, 2020 and April 26, 2020, (the Safe Harbor period), but those reductions were eliminated by December 31, 2020, you are exempt from any reduction in loan forgiveness due to those reductions in salaries and wages.

What am I required to confirm or certify as part of my PPP loan forgiveness application?

On the PPP forgiveness application, an authorized representative of the borrower must certify to all of the following:

  • The dollar amount for which forgiveness is requested was used for eligible expenses;
  • Understanding the consequences of knowingly using funds for unauthorized purposes;
  • Payments for eligible costs for which forgiveness is being requested have been verified;
  • The recommended supporting documents have been submitted;
  • The information provided in the application and supporting documentation is true and correct in all material respects;
  • Tax documents submitted are consistent with those that have been or will be submitted to the IRS; and
  • Failure to provide additional information requested by the SBA may result in a determination of loan ineligibility or denial of forgiveness.

For a full description of the certifications, please refer to the Form 3508 or Form 3508EZ found on the SBA site.

Preparing for the PPP loan forgiveness application process

What dates should I be aware of related to PPP loan forgiveness?

Within the covered period

To be eligible for forgiveness, you need to use the loan proceeds on eligible costs within the 8-week or 24-week covered period (ending December 31, 2020, at the latest). 

Safe harbor

The safe harbor FTE provision gives you until the end of the year to restore employee headcount and wages to February 15, 2020 levels in order to avoid FTE penalties during the forgiveness process. Safe Harbors are explained in the Safe Harbor FAQ.

Deferral period

The deferral period ends: 

  1. On the date when the SBA makes a decision on your application for forgiveness, or;
  2. 10 months after the last day of the covered period, if you have not applied for forgiveness.

No payment of PPP loan principal, interest, and fees is due during the deferral period. 

If you received your promissory note before June 5, 2020, it may indicate that your first payment is due 6 months from the date of the note. The PPP Flexibility Act (signed on June 5, 2020) extended the deferral period, so you can disregard the original 6 month period referenced in the promissory note.

You will receive a loan statement before any payment is due, so you can plan accordingly.

Once the Wells Fargo PPP loan forgiveness online application is available

Eligible customers will be able to start their loan forgiveness application online and upload the recommended supporting documents.

If you received a PPP loan through Wells Fargo, please do not attempt to submit the application downloaded from the SBA site. All forgiveness applications for Wells Fargo PPP loans must be submitted using the Wells Fargo PPP loan forgiveness online application, accessible through Wells Fargo Business Online®, or the Commercial Electronic Office® (CEO®).

Although you can apply for forgiveness at any time, to maximize PPP loan forgiveness, you’ll want to make sure you have utilized the funds for eligible costs within the covered period. You’ll need to calculate salary reduction conditions for the entire covered period, and should be ready to provide documentation for all your eligible expenses when you complete your application.

Be prepared to provide documentation for all your eligible expenses when you complete your application.

You have until the maturity date of the loan to apply for loan forgiveness. However, there are things you may want to consider before deciding when to apply:

  • To get full forgiveness, make sure you have used all your PPP funds for eligible costs. You have up to 24 weeks to do so.
  • When you submit a loan forgiveness application and the SBA notifies Wells Fargo of the loan forgiveness amount, or that the loan is not eligible for forgiveness, your payment deferral period will end. At that point, loan payments on any amount not forgiven, including any interest, will become due and you will need to start making monthly payments, if applicable. You will receive a loan statement before any payment is due, so you can plan accordingly.
  • If you have repaid your loan in full before submitting a loan forgiveness application, you will not be eligible for forgiveness. Partial repayment may also affect forgiveness.

We will continue to keep you updated on key dates by email and on this site, as you continue through the forgiveness process.

Which loan forgiveness application should I complete?

There are two PPP loan forgiveness applications, Form 3508, and Form 3508EZ. 

The EZ form is a shorter application process that requires fewer calculations and less supporting documentation than the standard form. Consider using Form 3508EZ if you meet one of the following conditions:

Self-employed with no employees

You are a self-employed individual who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form (SBA Form 2483). 

Or 

Salaries and the number of employees and hours were not reduced during the covered period

You did not reduce annual salary or hourly wages of any employee by more than 25 percent during the covered period or the alternative payroll covered period compared to the period between January 1, 2020 and March 31, 2020 (for purposes of this statement, “employees” means only those employees that did not receive, during any single period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000); 

AND

You did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the covered period. (Ignore reductions that arose from an inability to rehire individuals who were employees on February 15, 2020 if you were unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020. Also, ignore reductions in an employee’s hours that you offered to restore and the employee refused). See 85 FR 33004, 33007 (June 1, 2020) for more details. 

Or 

Salaries were not reduced and unable to return to same level of business activity during the covered period

You did not reduce annual salary or hourly wages of any employee by more than 25 percent during the covered period or the alternative payroll covered period compared to the period between January 1, 2020 and March 31, 2020 (for purposes of this statement, “employees” means only those employees that did not receive, during any single period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000); 

AND 

You were unable to operate during the covered period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19. 

For further guidance, please refer to the SBA site.

If your PPP loan is through Wells Fargo, please do not attempt to submit a loan forgiveness application downloaded from the SBA site. All forgiveness applications for Wells Fargo PPP loans must be submitted using the Wells Fargo PPP loan forgiveness online application, accessible through Wells Fargo Business Online®, or the Commercial Electronic Office® (CEO®). We will notify you once the online  application becomes available.

What information and documentation will I need to submit for my PPP loan forgiveness application?

To help you prepare for the PPP loan forgiveness application, you may want to review the recommended supporting documents. You can also view the latest versions of the PPP loan forgiveness applications, Form 3508 and Form 3508EZ on the SBA site.

If your PPP loan is through Wells Fargo, please do not attempt to submit a PPP loan forgiveness application downloaded from the SBA site. All forgiveness applications for Wells Fargo PPP loans must be submitted using the Wells Fargo PPP loan forgiveness online application, accessible through Wells Fargo Business Online®, or the Commercial Electronic Office® (CEO®). We will notify you once the online application becomes available.

Some of the information, including your Wells Fargo and SBA loan numbers, will be automatically pre-filled in your online application.

There are slightly different documentation requirements between Form 3508 and 3508EZ.

Form 3508:

The PPP loan forgiveness application includes the PPP loan forgiveness calculation form and Schedule A, which you will need to complete. You’ll also be required to submit documentation, including:

Payroll documentation verifying eligible payments, consisting of the following:

  • Bank account statements or third-party payroll service provider reports
  • Tax forms including IRS Payroll tax filings (typically Form 941) and state quarterly business and individual wage reporting and unemployment insurance tax filings
  • Payment receipts, cancelled checks, or account statements documenting employer benefits contributions

FTE documentation showing the number of FTE employees for the FTE reduction reference period selected.

Nonpayroll documentation verifying the existence of obligations/services prior to February 15, 2020, and eligible payments, consisting of the following:

  • Business mortgage interest payments: account statements or amortization schedules and receipts or cancelled checks
  • Business rent or lease payments: account statements or current lease and receipts or cancelled checks 
  • Business utility payments: account statements or invoices and receipts or cancelled checks
While the bank may have some of these documents on file, the SBA requires you, as the borrower, to supply the documents to validate your expenses. 

Form 3508EZ: 

The documents required with the 3508EZ are the same as the 3508 Form, except for the following differences:

  • Form 3508EZ does not have a Schedule A
  • The FTE report is not required

How can I estimate what portion of the PPP loan will be forgiven?

You can view the latest version of the PPP loan forgiveness application on the SBA site. This form will guide you through the information and documentation required for loan forgiveness and will help you estimate your loan forgiveness amount.

If you received a PPP loan through Wells Fargo, please do not attempt to submit a PPP loan forgiveness application downloaded from the SBA site. All forgiveness applications for Wells Fargo PPP loans must be submitted using the Wells Fargo PPP loan forgiveness online application, accessible through Wells Fargo Business Online®, or the Commercial Electronic Office® (CEO®). We will notify you once the online application becomes available.

You have time — there is no immediate need to apply for PPP loan forgiveness, you have until the maturity date of your loan to submit an application. However, If you submit your loan forgiveness application within 10 months of the end of the covered period, you will not have to make any payments of principal or interest on your loan before the date on which the SBA makes a final decision on the loan forgiveness amount.

We will continue to keep you updated on key dates by email and on this site, as you continue through the forgiveness process.

Applying for PPP loan forgiveness

Is PPP loan forgiveness automatic? If not, when do I request loan forgiveness and submit a loan forgiveness application?

No, PPP loan forgiveness is not automatic. You will need to apply for forgiveness through the lender who issued your PPP loan. 

You have time — there is no immediate need to apply for PPP loan forgiveness, you have until the maturity date of your loan to submit an application. However, If you submit your loan forgiveness application within 10 months of the end of the covered period, you will not have to make any payments of principal or interest on your loan before the date on which the SBA makes a final decision on the loan forgiveness amount. 

We will continue to keep you updated on key dates by email and on this site, as you continue through the forgiveness process. 

If you received a PPP loan through Wells Fargo, please do not attempt to submit a PPP loan forgiveness application downloaded from the SBA site. All forgiveness applications for Wells Fargo PPP loans must be submitted - using the Wells Fargo PPP loan forgiveness online application, accessible through Wells Fargo Business Online®, or the Commercial Electronic Office® (CEO®). We will notify you once the online application becomes available.

Be prepared to provide documentation for all your eligible expenses when you complete your application.

How do I apply for PPP loan forgiveness?

You must apply for PPP loan forgiveness through your PPP lender.

If you received a PPP loan through Wells Fargo, please do not attempt to submit a PPP loan forgiveness application form downloaded from the SBA site. All forgiveness applications for Wells Fargo PPP loans must be submitted using the Wells Fargo PPP loan forgiveness online application, accessible through Wells Fargo Business Online®, or the Commercial Electronic Office® (CEO®). We will notify you once the online application becomes available.

You have until the maturity date of the loan to apply for loan forgiveness. However, there are things you may want to consider before deciding when to apply:

  • To get full forgiveness, make sure you have used all your PPP funds for eligible costs. You have up to 24 weeks to do so.
  • When you submit a loan forgiveness application and the SBA notifies Wells Fargo of the loan forgiveness amount, or that the loan is not eligible for forgiveness, your payment deferral period will end. At that point, loan payments on any amount not forgiven, including any interest, will become due and you will need to start making monthly payments, if applicable. 
  • If you have repaid your loan in full before submitting a loan forgiveness application, you will not be eligible for forgiveness. Partial repayment may also affect forgiveness.

The Wells Fargo PPP loan forgiveness online application includes additional details on the information and documents required for loan forgiveness and will help guide you through the forgiveness application process. Some of the information, including your Wells Fargo and SBA loan numbers, will be pre-filled within your online application. We have created a Loan Forgiveness Preparation Checklist (PDF) to help you prepare. You’ll want to have all of your recommended supporting documents ready to upload online when you apply.

You can also view the latest version of the PPP loan forgiveness application, including on the SBA site.

I heard there was a forgiveness application on the SBA site. Can I complete that and send it to Wells Fargo?

No. 

If you received a PPP loan through Wells Fargo, please do not attempt to submit a PPP loan forgiveness application form downloaded from the SBA site. All forgiveness applications for Wells Fargo PPP loans must be submitted using the Wells Fargo PPP loan forgiveness online application, accessible through Wells Fargo Business Online®, or the Commercial Electronic Office® (CEO®). We will notify you once the online application becomes available. Rest assured, the Wells Fargo PPP loan forgiveness online application will help guide you through the forgiveness application. Once you submit your application, a dedicated associate or your relationship manager will work with you to ensure your application is complete and communicate with you throughout the forgiveness process.

You have until the maturity date of the loan to apply for loan forgiveness. However, there are things you may want to consider before deciding when to apply:

To get full forgiveness, make sure you have used all your PPP funds for eligible costs. You have up to 24 weeks to do so.

When you submit a loan forgiveness application and the SBA notifies Wells Fargo of the loan forgiveness amount, or that the loan is not eligible for forgiveness, your payment deferral period will end. At that point, loan payments on any amount not forgiven, including any interest, will become due and you will need to start making monthly payments, if applicable. 

If you have repaid your loan in full before submitting a loan forgiveness application, you will not be eligible for forgiveness. Partial repayment may also affect forgiveness.

Do I need my Wells Fargo loan number and SBA loan number to apply for PPP loan forgiveness? Where can I find them?

If you received a PPP loan through Wells Fargo, your loan numbers will be automatically pre-filled for you in the application. You will not need to have them ahead of time to be able to apply for forgiveness.

Please do not attempt to submit a PPP loan forgiveness application form downloaded from the SBA site. All forgiveness applications for Wells Fargo PPP loans must be submitted using the Wells Fargo PPP loan forgiveness online application, accessible through Wells Fargo Business Online®, or the Commercial Electronic Office® (CEO®). We will notify you once the online application becomes available.

You have time — there is no immediate need to apply for PPP loan forgiveness, you have until the maturity date of your loan to submit an application. We will continue to keep you updated on key dates on this site, as well as by email and U.S. mail, as you continue through the forgiveness process.

We will continue to keep you updated on key dates by email and on this site, as you continue through the forgiveness process.

How do I add documents, make changes, or withdraw my loan forgiveness application after it has been submitted?

If you need to make a change, add or replace a document, contact your dedicated associate or relationship manager and they will work with you to complete the necessary updates.

Once we submit it to the SBA, you are no longer able to make any changes to your application, including adding or replacing documents. 

If you want to withdraw your application, you will also need to contact your dedicated associate or relationship manager and they can initiate the process to withdraw your forgiveness application. You will receive an email asking you to sign on to Wells Fargo Business Online® or the Commercial Electronic Office® (CEO®) to access your forgiveness application and confirm your request to withdraw. Your forgiveness application is not considered withdrawn until you confirm online the request to withdraw.

If the SBA asks for additional documents as part of its review, we will notify you and you will be allowed to add additional documents at that time.

When will I know if my PPP loan has been forgiven, and if so, how much will be forgiven?

PPP loan forgiveness will be based on your ability to meet the eligibility requirements for loan forgiveness, which includes, but is not limited to:

  • Using the funds for allowable expenses (e.g. payroll, mortgage interest, rent and lease payments, utilities) during the 8-week or 24-week covered period that you selected.
  • Submitting a completed PPP loan forgiveness application, including all the recommended supporting documents before the maturity date of your loan.

Once you submit your Wells Fargo PPP loan forgiveness online application, you will receive an email confirmation. A dedicated associate or relationship manager will review your application and work with you to ensure everything is complete and processed efficiently. 

Once your application is considered complete, Wells Fargo has 60 days to review your application, including documents, and submit a decision to the SBA. After Wells Fargo submits a decision to the SBA, you will receive an email confirmation. The SBA has up to 90 days to review the application. Wells Fargo will notify you within five business days of receiving any loan forgiveness amount from the SBA, or if the SBA determines that your loan is not eligible for forgiveness. You may appeal the SBA’s decision within 30 days.

The amount of loan forgiveness may be up to 100% of the principal amount of your PPP loan, plus accrued interest, if the funds were used for eligible expenses.

Note: The SBA will deduct any EIDL advance amount (up to a maximum of $10,000) from the final forgiveness amount, as applicable.  This amount will remain as part of the unforgiven portion of the PPP loan that is repayable to the bank. Make sure to list the amount of any EIDL advance on the loan forgiveness application, where it is requested.

For any amounts that are not forgiven, you will be required to begin paying back that amount, plus accrued interest, over the remaining course of the PPP loan (with a loan term of either 2 years or 5 years based on your PPP origination date).

You will receive a loan statement before any payment is due, so you can plan accordingly.

How and when do I start making payments, and how do I pay off my loan?


If you submit your loan forgiveness application within 10 months of the end of the covered period, you will not have to make any payments of principal or interest on your loan before the date on which the SBA makes a final decision on the loan forgiveness amount. Once the SBA makes a final decision, your deferral period is over and you will be required to repay any unforgiven portion of the loan, plus any accrued interest on that portion. You will not be required to pay back any of the forgiven amount and associated interest. 

If you’d like to make a complete payoff of your PPP loan and are using Wells Fargo Business Online® or you are a Wealth & Investment Management customer, please call 1-844-304-8911. If you are a Commercial Electronic Office® (CEO®) customer, please contact your dedicated associate or relationship manager or call 1-800-AT-WELLS (1-800-289-3557) option 1, and then follow the prompts for loans. If you would like a letter confirming the payoff of your loan, you may request one at the time of payment or afterwards using the same contact numbers provided. Customers requesting a complete payoff of their PPP loan will be responsible for paying all outstanding principal as well as any accrued interest.

Where can I find more information on PPP forgiveness?

More information on SBA PPP loan forgiveness can be found on the SBA site and on the following pages.

If you received a PPP loan through Wells Fargo, please do not attempt to submit a PPP loan forgiveness application downloaded from the SBA site. All forgiveness applications for Wells Fargo PPP loans must be submitted using the Wells Fargo PPP loan forgiveness online application, accessible through Wells Fargo Business Online®, or the Commercial Electronic Office® (CEO®). We will notify you once the online application becomes available.

The information contained in this page is based on laws, rules, regulations, and related guidance with respect to the Paycheck Protection Program (PPP), including guidance issued by the U.S. Small Business Administration (SBA) on August 24, 2020. We will periodically update this information, so please check back often and consider bookmarking this page. In the event of any discrepancies between the information on this site and the SBA’s site, please follow official SBA guidance.

How to Prepare

Learn more about the essentials of the Paycheck Protection Program

Get details

Loan Forgiveness Center

What you need to know about PPP loan forgiveness

Visit the center