One of the most appealing parts of PPP loans is the possibility of not having to repay some—or all—of your loan. To avoid having to repay your PPP loan, the loan must be “forgiven” by the Small Business Administration (SBA).
Your loan is not automatically forgiven. Instead, you need to apply to have your loan forgiven by the SBA. BlueVine will facilitate PPP loan forgiveness for the majority of the PPP loans we originated. If applicable, BlueVine will contact you once it’s time to apply for forgiveness.
What amount of the PPP loan is forgiven?
The amount of the PPP loan that’ll be eligible for forgiveness depends largely on how the loan proceeds were spent during the Covered Period, as well as employee headcount and salary retention.
The PPP program offers full forgiveness for businesses with employees if the following are met during its Covered Period:
- It used 60% of its total PPP funds towards eligible payroll costs.
- The additional 40% of the PPP funds were used only for other PPP-eligible expenses.
- It re-hired or did not lay off any of its staff (with some exceptions)
- It did not reduce staff headcount (with some exceptions)
If the business wasn’t able to retain all employees OR was required to reduce employee salaries, it may qualify for an exemption that would exclude them from reducing their total forgiveness amount. Additional information can be found in our Determining FTE and Wage Reduction for PPP Loan Forgiveness support article.
The information, opinions, and advice in this post are provided for educational purposes only and do not necessarily state or reflect those of BlueVine and/or its partners, including The Bancorp Bank and Celtic Bank. Neither BlueVine nor its partners are responsible for the accuracy of any content provided by author(s) or contributor(s). For information about BlueVine products and services, please visit the BlueVine FAQ page. For information about the Paycheck Protection Program, please visit the SBA’s page.