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Important updates on the Paycheck Protection Program
The Small Business Administration (SBA) is no longer accepting Paycheck Protection Program (PPP) loan applications. 1
For the latest information on PPP please visit the SBA website.
These FAQs are provided for your convenience. Please be sure to understand and comply with the guidance issued by the SBA.
What is the Paycheck Protection Program (PPP)?
The Paycheck Protection Program (PPP) is a federal relief program established by Congress and implemented by the U.S. Treasury Department and the Small Business Administration (SBA) with rules, requirements, protocols and processes that all participating lenders, including Bank of America, must follow.
The eligibility requirements are outlined for applicants on the U.S. Treasury and SBA websites.
What counts as payroll costs?
Employee payroll costs consists of the following:
Owner Compensation for independent contractor or sole proprietor consists of wage, commissions, income or net earnings from self-employment or similar compensation, not to exceed a total of $100,000 in annual compensation, on an annualized basis.
Will Bank of America pay fees to third-party agents who have assisted clients with the preparation of Paycheck Protection Program loan applications?
In the absence of a pre-loan approval written agreement between the agent and Bank of America, Bank of America does not pay fees or other compensation to agents who represent or assist borrowers through the Paycheck Protection Program.
Does Bank of America disclose the names or other information of PPP borrowers? Was my name or information disclosed by the SBA – or will it be in the future?
Bank of America does not publicly disclose the names or other information of clients who receive PPP loans. For more information on the disclosure of names by the SBA, please visit www.sba.gov/foia.
How can I make a payment to my PPP loan through Business Advantage 360, Bank of America’s small business online banking?
You can make a principal-only payment or full payoff to your PPP loan through Business Advantage 360 by following these steps:
Eligible clients can apply now for PPP loan forgiveness
Our PPP loan forgiveness portal is now open and includes a simplified forgiveness application for PPP loans of $150,000 or less. We will email clients with a link to access our loan forgiveness application over the coming weeks, when the application becomes available to them.
When can I apply for PPP loan forgiveness?
The simplified SBA Form 3508S is now available, in addition to the revised SBA Form 3508EZ and SBA Form 3508 applications. Eligible clients will receive an email with a link to access our loan forgiveness application when it becomes available to them.
As a reminder, based on the latest updates from the SBA, you now have more time to gather your documents and prepare your application. The timeframe for applying for loan forgiveness in the promissory note no longer applies.
For additional assistance with PPP loan forgiveness documentation, view our documentation guide.
Do I need an Online Banking ID to access my PPP loan forgiveness application online?
Yes, you need a profile set up for Business Advantage 360, our small business online banking.
If you don’t have one set up, please call us and we can help. We can be reached at 866.457.4892 on Monday through Friday from 8 a.m. to 8 p.m. Eastern.
How do I determine which application form I should use?
If your PPP loan is $150,000 or less, you will apply for loan forgiveness online through Bank of America using the simplified SBA Form 3508S.
If your PPP is more than $150,000, you will apply for loan forgiveness online through Bank of America using one of the following forms:
How can I prepare to apply for loan forgiveness?
Once you determine which SBA Loan Forgiveness Application Form you will use, we recommend that prior to applying online through Bank of America for PPP loan forgiveness, you carefully review and fill out the applicable form, and gather any required documentation specified in the instructions:
For borrowers applying for loan forgiveness using SBA Form 3508EZ and SBA Form 3508, please note:
For additional assistance with PPP loan forgiveness documentation, view our documentation guide.
How can I apply for PPP loan forgiveness if I cannot locate or deleted the email with instructions?
The email can be found in your Alerts History within Business Advantage 360, our small business online banking, titled “Our Paycheck Protection Program loan forgiveness application is now available.”
If I elect to use the SBA's new loan forgiveness application (Form 3508S), will I be required to submit documentation?
The latest guidance from the SBA states for first draw PPP loan forgiveness applications using the S form, documentation does not need to be uploaded, however, you are required to retain all records relating to your PPP loan and may be required to submit such documentation to the SBA, upon request.
For second draw PPP loan forgiveness applications, you may be required to provide revenue reduction documentation if your loan was $150,000 or less and you did not provide such revenue reduction documentation prior to your forgiveness application.
The SBA requires borrowers using Form 3508 and Form 3508EZ to submit documentation in connection with their loan forgiveness application. You will not be eligible to receive loan forgiveness without supporting documentation.
For detailed information on the application, including Covered Periods, the type of costs that are eligible for forgiveness, and what documentation you will need to submit in connection with your application, please visit the U.S. Treasury and SBA websites.
For additional assistance with PPP loan forgiveness documentation, view our documentation guide.
Can I submit a paper application for PPP loan forgiveness?
Applications for PPP loan forgiveness at Bank of America must be submitted digitally through our online PPP loan forgiveness application portal. We will not accept paper loan forgiveness applications.
How long do I have to apply for loan forgiveness?
The PPP rules currently provide that you may submit a loan forgiveness application at any time after the end of your Covered Period and before the maturity date of your loan, as long as you have an outstanding balance on your loan. However, we understand the SBA may be changing the deadline to apply for PPP loan forgiveness.
Please check with sba.gov for the latest guidance on your forgiveness application window.
Please note that your PPP loan deferral period will end prior to your maturity date. If you applied for forgiveness prior to your deferral period, you will need to begin making payment on any unforgiven amount once the SBA has made a decision on your forgiveness application. If you have not applied for forgiveness prior to your deferral period, you will need to start making payments at the end of your deferral period.
I paid off my PPP loan – am I still eligible for forgiveness on that loan?
You may still be eligible to apply for forgiveness. Please contact us so that we may further assist you. We can be reached at 866.457.4892 on Monday through Friday from 8 a.m. to 8 p.m. Eastern
Do I need to apply for forgiveness to be eligible to request a SBA Loan Review?
Yes. A completed Forgiveness application is necessary, in order to be eligible to submit a request for a SBA review.
If you have not yet applied for forgiveness, please check your email, and locate your invitation to apply for forgiveness. Once your forgiveness application has been submitted, and a forgiveness decision has been communicated to you, you may request a SBA loan review if applicable.
How does the Economic Aid Act, signed into law on December 27, 2020, change the process for Economic Injury Disaster Loan (EIDL) Advance deductions?
The Economic Aid Act repealed the deduction of EIDL Advances from loan forgiveness amounts. According to guidance from the SBA:
How does new legislation change the PPP loan forgiveness process?
Legislation signed into law December 27, 2020, known as the Economic Aid Act, contained the following changes:
The Paycheck Protection Program Flexibility Act, signed into law on June 5, 2020 contained the following requirements:
For additional details, please visit the SBA website.
When does my PPP loan deferral period end? When do I need to start making payments on my PPP loan?
The Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act) extended the deferral period for borrower payments of principal and interest on all PPP loans to the earlier of:
NOTE: Interest will continue to accrue during the payment deferral period. After the deferral period, clients with an unforgiven balance will receive repayment letters indicating when their first payment is due.
Can I apply for forgiveness prior to the end of my elected Covered Period?
No. The current SBA application for PPP loan forgiveness contains certain representations and documentation requirements that relate to the end of the Covered Period. As a result, you will only be able to apply for loan forgiveness through Bank of America once your Covered Period has ended.
Who determines the amount of loan forgiveness?
The U.S. Treasury and Small Business Administration (SBA) are responsible for the rules of the program, which determine the amount of loan forgiveness you may receive. This can include full, partial or no forgiveness.
We encourage you to visit the U.S. Treasury and SBA websites for the most up-to-date program rules and guidance.
Where should I go if I have questions?
For detailed information on the application, Covered Periods, the type of costs that are eligible for forgiveness and what documentation you will need to submit in connection with your application, please visit the U.S. Treasury and SBA websites.
For additional assistance with PPP loan forgiveness documentation, view our documentation guide.
How is the amount of owner compensation that is eligible for loan forgiveness determined? What if I am an owner of multiple businesses with multiple PPP loans?
The applicable IFRs and FAQs provide that the amount of compensation of owners who work at their business that is eligible for forgiveness depends on the business type and whether the borrower is using an eight-week or 24-week Covered Period. The amount of loan forgiveness requested for owner-employees and self-employed individuals’ payroll compensation is capped at the lesser of $20,833 per individual or the 2.5-month equivalent of their applicable compensation in 2019 (whichever is lower) in total across all businesses in which he or she has an ownership stake. For borrowers that received a PPP loan before June 5, 2020 and elect to use an eight-week Covered Period, this cap is $15,385 per individual or the 8-week equivalent of their applicable compensation in 2019 (whichever is lower) in total across all businesses in which he or she has an ownership stake. If their total compensation across businesses that receive a PPP loan exceeds the cap, owners can choose how to allocate the capped amount across different businesses
Is interest on unsecured credit eligible for loan forgiveness?
As of August 4, 2020, in Frequently Asked Questions (FAQs) on PPP Loan Forgiveness, the SBA stated, no. Payments of interest on business mortgages on real or personal property (such as an auto loan) are eligible for loan forgiveness. Interest on unsecured credit is not eligible for loan forgiveness because the loan is not secured by real or personal property. Although interest on unsecured credit incurred before February 15, 2020 is a permissible use of PPP loan proceeds, this expense is not eligible for forgiveness.
What utility payments are eligible for forgiveness?
Business payments for a service for the distribution of electricity, gas, water, transportation, telephone or internet access for which service began before February 15, 2020.
Are rent payments made to related parties eligible for forgiveness?
In an Interim Final Rule on Treatment of Owners and Forgiveness of Certain Nonpayroll Costs originally posted on August 24, 2020, the SBA has stated rent payments to related parties are eligible for forgiveness so long as 1) “the amount of loan forgiveness requested for rent or lease payments to a related party is no more than the amount of mortgage interest owed on the property during the Covered Period that is attributable to the space being rented by the business” and 2) “the lease and mortgage were entered into prior to February 15, 2020.” Borrowers must provide mortgage interest documentation to substantiate these payments. And where the payor requests forgiveness for amounts paid to a related party, the related party cannot also request forgiveness for that same amount. Additionally, “[w]hile rent or lease payments to a related party may be eligible for forgiveness, mortgage interest payments to a related party are not eligible for forgiveness.”
Are any individuals with an ownership stake in a PPP borrower exempt from application of the PPP owner-employee compensation rule when determining the amount of their compensation that is eligible for loan forgiveness?
In an Interim Final Rule on Treatment of Owners and Forgiveness of Certain Nonpayroll Costs originally posted on August 24, 2020, the SBA clarified that, for C- and S-Corp borrowers, owners with less than a 5% ownership stake are exempt from the owner-compensation cap.
Are amounts attributable to the business operation of a tenant or sub-tenant of the PPP borrower or, in the context of home-based businesses, household expenses, eligible for forgiveness?
No. In an Interim Final Rule on Treatment of Owners and Forgiveness of Certain Nonpayroll Costs originally posted on August 24, 2020, the SBA has stated that the amount of loan forgiveness requested for nonpayroll costs may not include any amount attributable to the business operation of a tenant or sub-tenant of the PPP borrower or, for home-based businesses, household expenses. The IFR provides four examples:
I am planning to (i) sell all or part of my interest in my company, or (ii) merge my company with another company or (iii) sell some or all of the assets of my company to a third party, before my PPP loan is forgiven or paid in full. Do I need to notify Bank of America or the SBA?
The SBA published a Procedural Notice on Changes of Ownership on October 2 which is available on the SBA website. This notice requires, in most situations, that the PPP lender provide confirmation to the SBA of your satisfaction of the requirements set forth in the Procedural Notice. Please contact your small business banker or call us at 866.457.4892 as soon as possible, but at least 10 business days before the proposed date of the sale or merger, so that we can provide assistance in setting up an escrow account if needed and answer other questions you may have as you go through this process.
How can I decline my invitation to apply for PPP loan forgiveness?
If you wish to decline PPP loan forgiveness:
What other assistance is available for Small Business clients who have been negatively impacted by the coronavirus?