Borrowers will be required to complete the Loan Necessity Questionnaire and to provide copies of the “Documents that Each Borrower Must Maintain but is Not Required to Submit.” After completing and submitting the necessary information to the lender within 10 business days of the request, the lender must then upload the completed questionnaire, manually enter borrower responses and upload supporting documentation within five business days of receiving it back from the PPP borrower.

The new forms are designed to collect supplemental information SBA loan reviewers will use in evaluating the good-faith certification borrowers made on their PPP applications that economic uncertainty made their loan request necessary to support ongoing operations.

The forms are SBA Form 3509, Paycheck Protection Program Loan Necessity Questionnaire (For-Profit Borrowers), (view PDF)  and SBA Form 3510, Paycheck Protection Program Loan Necessity Questionnaire (Non-Profit Borrowers) (view PDF).

While reiterating that lenders are not required to verify or validate the borrower’s responses or supporting documentation submitted with the questionnaires, SBA emphasized that “failure to timely respond to any SBA request may result in a delay in SBA’s remittance of the loan forgiveness amount, if any, or in a determination that the borrower was ineligible for the loan or ineligible to receive the loan amount or loan forgiveness amount claimed by the borrower (or the loan forgiveness amount in the lender’s forgiveness decision).

Since businesses are not taxed on the proceeds of a forgiven PPP loan, the expenses are not deductible. This results in neither a tax benefit nor tax harm since the taxpayer has not paid anything out of pocket.

If a business reasonably believes that a PPP loan will be forgiven in the future, expenses related to the loan are not deductible, whether the business has filed for forgiveness or not. Therefore, we encourage businesses to file for forgiveness as soon as possible.

In the case where a PPP loan was expected to be forgiven, and it is not, businesses will be able to deduct those expenses.

States Secretary Steven T. Mnuchin, “These provisions ensure that all small businesses receiving PPP loans are treated fairly, and we continue to encourage borrowers to file for loan forgiveness as quickly as possible.”

Click here to view the revenue ruling.

Click here to view the revenue procedure.

The information contained in this page is based on laws, rules, regulations, and related guidance with respect to the PPP, including guidance issued by the U.S. Small Business Administration (SBA) on January 19, 2021. This information may be updated periodically. In the event of any discrepancies between the information on this site and the SBA’s site, please follow official SBA guidance.

Documents that Each Borrower Must Submit with its PPP Loan Forgiveness Application Form 3508S

For PPP loans of $150,000 or less, you'll use a streamlined application process with the updated 3508S application. You are not required to submit documentation with your forgiveness application, yet you must retain your supporting documentation. The SBA may ask to review your application at any time. Please carefully read the Records Retention Requirement: The Borrower must retain all employment records/payroll documentation in its files for four years and all other documentation for three years after the date the loan forgiveness application is submitted to the lender, and permit authorized representatives of SBA, including representatives of its Office of Inspector General, to access such files upon request. The Borrower must provide documentation independently to a lender to satisfy relevant Federal, State, local or other statutory or regulatory requirements or in connection with an SBA loan review or audit.

Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period consisting of each of the following:

a. Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.

b. Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period:

i. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and

ii. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.

c. Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee group health, life, disability, vision or dental insurance and retirement plans that the Borrower included in the Requested Loan Forgiveness Amount.

Nonpayroll: For categories a-c, documentation verifying existence of the obligations/services prior to February 15, 2020 and, for all categories, eligible payments from the Covered Period.

a. Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.

b. Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.

c. Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

d. Covered operations expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

e. Covered property damage costs: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the costs were related to property damage and vandalism or looting due to public disturbances that occurred during 2020 and such costs were not covered by insurance or other compensation.

f. Covered supplier costs: Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods), copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

g. Covered worker protection expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the expenditures were used by the Borrower to comply with applicable COVID-19 guidance during the Covered Period.

Other Records: All records relating to the Borrower’s PPP loan, including documentation submitted with its PPP loan application, documentation supporting the Borrower’s certifications as to its eligibility for a PPP loan (including the Borrower’s gross receipt reduction certification for a Second Draw PPP Loan, if applicable), documentation necessary to support the Borrower’s loan forgiveness application, and documentation demonstrating the Borrower’s material compliance with PPP requirements.

The information contained in this page is based on laws, rules, regulations, and related guidance with respect to the PPP, including guidance issued by the U.S. Small Business Administration (SBA) on January 19, 2021. This information may be updated periodically. In the event of any discrepancies between the information on this site and the SBA’s site, please follow official SBA guidance.

Documents that Each Borrower Must Submit with its PPP Loan Forgiveness Application Form 3508EZ

PPP Loan Forgiveness Calculation Form 3508EZ

Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period consisting of each of the following:

a. Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.

b. Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period:

i. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and

ii. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.

c. Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee group health, life, disability, vision or dental insurance and retirement plans that the Borrower included in the forgiveness amount.

d. If you checked only the second box on the checklist on page 1 of these instructions, the average number of full-time equivalent employees on payroll employed by the Borrower on January 1, 2020 and at the end of the Covered Period.

Nonpayroll: For categories a-c, documentation verifying existence of the obligations/services prior to February 15, 2020 and, for all categories, eligible payments from the Covered Period.

a. Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.

b. Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.

c. Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

d. Covered operations expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

e. Covered property damage costs: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the costs were related to property damage and vandalism or looting due to public disturbances that occurred during 2020 and such costs were not covered by insurance or other compensation.

f. Covered supplier costs: Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods), copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

g. Covered worker protection expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the expenditures were used by the Borrower to comply with applicable COVID-19 guidance during the Covered Period.

Documents that Each Borrower Must Maintain but is Not Required to Submit

Documentation supporting the certification that annual salaries or hourly wages were not reduced by more than 25 percent during the Covered Period relative to the most recent full quarter before the Covered Period. This documentation must include payroll records that separately list each employee and show the amounts paid to each employee during the most recent full quarter before the Covered Period, and the amounts paid to each employee during the Covered Period.

Documentation regarding any employee job offers and refusals, refusals to accept restoration of reductions in hours, firings for cause, voluntary resignations, written requests by any employee for reductions in work schedule, and any inability to hire similarly qualified employees for unfilled positions on or before December 31, 2020 (or, for a PPP loan made after December 27, 2020, the last day of the Covered Period).

Documentation supporting the certification, if applicable, that the Borrower 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, other than any reductions that arose from an inability to rehire individuals who were employees on February 15, 2020, if the Borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020 (or, for a PPP loan made after December 27, 2020, the last day of the Covered Period). This documentation must include payroll records that separately list each employee and show the amounts paid to each employee between January 1, 2020 and the end of the Covered Period.

Documentation supporting the certification, if applicable, that the Borrower was unable to operate between February 15, 2020 and the end of 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 (or, for a PPP loan made after December 27, 2020, requirements established or guidance issued between March 1, 2020 the last day of the Covered Period) 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. This documentation must include copies of the applicable requirements for each borrower location and relevant borrower financial records.

All records relating to the Borrower’s PPP loan, including documentation submitted with its PPP loan application, documentation supporting the Borrower’s certifications as to the necessity of the loan request and its eligibility for a PPP loan (including the Borrower’s gross receipt reduction certification for a Second Draw PPP Loan, if applicable), documentation necessary to support the Borrower’s loan forgiveness application, and documentation demonstrating the Borrower’s material compliance with PPP requirements.

Records Retention Requirement: The Borrower must retain all such documentation in its files for six years after the date the loan is forgiven or repaid in full, and permit authorized representatives of SBA, including representatives of its Office of Inspector General, to access such files upon request. The Borrower must provide documentation independently to a lender to satisfy relevant Federal, State, local or other statutory or regulatory requirements or in connection with an SBA loan review or audit.

The information contained in this page is based on laws, rules, regulations, and related guidance with respect to the PPP, including guidance issued by the U.S. Small Business Administration (SBA) on January 19, 2021. This information may be updated periodically. In the event of any discrepancies between the information on this site and the SBA’s site, please follow official SBA guidance.

Documents that Each Borrower Must Submit with its PPP Loan Forgiveness Application

PPP Loan Forgiveness Calculation Form PPP

Schedule A

Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period consisting of each of the following:

a. Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.

b. Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period:

i. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and

ii. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.

c. Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee group health, life, disability, vision or dental insurance and retirement plans that the Borrower included in the forgiveness amount (PPP Schedule A, lines (6) and (7)).

FTE: Documentation showing (at the election of the Borrower):

a. the average number of FTE employees on payroll per week employed by the Borrower between February 15, 2019 and June 30, 2019;

b. the average number of FTE employees on payroll per week employed by the Borrower between January 1, 2020 and February 29, 2020; or

c. in the case of a seasonal employer, the average number of FTE employees on payroll per week employed by the Borrower between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive 12-week period between February 15, 2019 and February 15, 2020.

The selected time period must be the same time period selected for purposes of completing PPP Schedule A, line 11. Documents may include payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941) and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state. Documents submitted may cover periods longer than the specific time period.

Nonpayroll: For categories a-c, documentation verifying existence of the obligations/services prior to February 15, 2020 and, for all categories, eligible payments from the Covered Period.

a. Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.

b. Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.

c. Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

d. Covered operations expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

e. Covered property damage costs: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the costs were related to property damage and vandalism or looting due to public disturbances that occurred during 2020 and such costs were not covered by insurance or other compensation.

f. Covered supplier costs: Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods), copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments.

g. Covered worker protection expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the expenditures were used by the Borrower to comply with applicable COVID-19 guidance during the Covered Period.

Documents that Each Borrower Must Maintain but is Not Required to Submit

PPP Schedule A Worksheet or its equivalent and the following:

a. Documentation supporting the listing of each individual employee in PPP Schedule A Worksheet Table 1, including the “Salary/Hourly Wage Reduction” calculation, if necessary.

b. Documentation supporting the listing of each individual employee in PPP Schedule A Worksheet Table 2; specifically, that each listed employee received during any single pay period in 2019 compensation at an annualized rate of more than $100,000.

c. Documentation regarding any employee job offers and refusals, refusals to accept restoration of reductions in hours, firings for cause, voluntary resignations, written requests by any employee for reductions in work schedule, and any inability to hire similarly qualified employees for unfilled positions on or before (i) December 31, 2020 for a PPP loan made before December 27, 2020 or (ii) the last day of the Covered Period for a PPP loan made after December 27, 2020.

d. Documentation supporting the certification, if applicable, that the Borrower was unable to operate between February 15, 2020, and the end of 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 (or, for a PPP loan made after December 27, 2020, requirements established or guidance issued between March 1, 2020 and the last day of the Covered Period) 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. This documentation must include copies of the applicable requirements for each borrower location and relevant borrower financial records.

e. Documentation supporting the PPP Schedule A Worksheet “FTE Reduction Safe Harbor 2.

All records relating to the Borrower’s PPP loan, including documentation submitted with its PPP loan application, documentation supporting the Borrower’s certifications as to the necessity of the loan request and its eligibility for a PPP loan (including the Borrower’s gross receipt reduction certification for a Second Draw PPP Loan, if applicable), documentation necessary to support the Borrower’s loan forgiveness application, and documentation demonstrating the Borrower’s material compliance with PPP requirements.

Records Retention Requirement: The Borrower must retain all such documentation in its files for six years after the date the loan is forgiven or repaid in full, and permit authorized representatives of SBA, including representatives of its Office of Inspector General, to access such files upon request. The Borrower must provide documentation independently to a lender to satisfy relevant Federal, State, local or other statutory or regulatory requirements or in connection with an SBA loan review or audit.

Feb. 22, 2021 - The Small Business Administration (SBA), in consultation with the Department of  Treasury, has provided much anticipated additional guidance concerning the forgiveness of Paycheck Protection Program (PPP) loans. The SBA has defined two tiers of PPP loan amounts in this guidance: PPP loans $150,000 or less or PPP loans greater than $150,000. If you are ready, you may now follow the guidance below to electronically submit your forgiveness form and supporting documents back to German American Bank. As your PPP lender, we will then decision and upload your completed forgiveness forms into the SBA portal for final forgiveness.

Forgiveness applications:

You can apply for forgiveness using a much abbreviated application form 3508S. The streamlined 2-page Form 3508S includes certifications from the borrower, yet does not require calculations to be submitted with the application. Only supporting documentation must be submitted with the application verifying forgivable payroll and non-payroll expenses. Borrowers are required to retain their documentation supporting their certification for six years as the SBA may request information and documents to review calculations as part of a review process should they choose to do so. Borrowers that use form 3508S are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages.

See SBA Forgiveness Forms and Instructions

To File For Forgiveness:
Please click the link below (or copy and paste the URL into your browser), which will allow you to complete, sign and submit the forgiveness form electronically to German American Bank’s portal. It will also allow you to upload the required supporting payroll and non-payroll documentation as set forth on page three (3) of the 3508S instructions.

Tips before you begin your electronic application:

1. Have all of the information and supporting documents for attachments available to you when you access the portal.If information is missing, it will delay the timing of your forgiveness application.
2. You will be asked for the SBA PPP Loan Number and the German American Bank PPP Loan Number, which are the same and can be found on your original loan document.
3. The system will not save uncompleted applications, yet you will be able to exit out and start the electronic application process again.

Form 3508S Forgiveness Application:  https://germanamerican.com/3508S

You will receive confirmation from German American Bank when your complete forgiveness application has been reviewed and successfully submitted into the SBA portal. You may receive follow up questions or requests for clarifications or additional information from us before we finalize your forgiveness application submission. Please note that the SBA ultimately has to approve your forgiveness application after our submission. The SBA has 90 days to accept and make forgiveness payment. We will notify you of the forgiveness amount after it is remitted to us by the SBA. Any unforgiven amount will then be repaid on the terms of your PPP note.

NOTES:

• If for any reason you do not want to apply for the PPP loan forgiveness, your PPP loan is a 1% fixed rate pursuant to the terms of your promissory note with a term of two (2) years if your loan closed on or before June 5, 2020, or five (5) years if your loan closed after June 5, 2020. There are no prepayment penalties or fees. Your first monthly payment of any loan amount which is not forgiven will be 16 months from the date you received your PPP loan funds. Originally your PPP loan was set to start repayment 6 months from the date you received your PPP loan funds.

Feb. 22, 2021 - The Small Business Administration (SBA), in consultation with the Department of  Treasury, has provided much anticipated additional guidance concerning the forgiveness of Paycheck Protection Program (PPP) loans. The SBA has defined two tiers of PPP loan amounts in this guidance: PPP loans $150,000 or less or PPP loans greater than $150,000. If you are ready, you may now follow the guidance below to electronically submit your forgiveness form and supporting documents back to German American Bank. As your PPP lender, we will then decision and upload your completed forgiveness forms into the SBA portal for final forgiveness.

Forgiveness applications:

You will choose to complete either the 3508EZ or the 3508 form based on the following guidance. Detailed form instructions are included in links below to help you prepare for your electronic submission.

1. Form 3508EZ can be used if you are a borrower who:

• is self-employed, independent contractor or sole proprietor and have no employees

OR

• did not reduce employees’ salaries or wages by more than 25% and did not reduce your employee numbers or hours OR
• did not reduce employees’ salaries or wages by more than 25% and were unable to operate at the same levels as before due to heath directives.

See SBA Forgiveness Forms and Instructions

2. Form 3508 is used If you are a borrower who does not meet the criteria for the EZ forgiveness form listed above.

See SBA Forgiveness Forms and Instructions

If you selected the eight (8) week coverage period OR if you selected the twenty-four (24) week coverage period and are ready to file early, please complete the appropriate forgiveness form. Remember, if you apply for forgiveness before the end of your elected coverage period AND have reduced employees’ salaries or wages in excess of 25%, you must account for the excess salary reduction for the full eight (8) week or twenty-four (24) week period. If you are still waiting for your twenty-four (24) week coverage period to end in order to optimize your forgiveness before filing, please complete the appropriate form when you are ready.

To File For Forgiveness:
Please click the applicable link below (or copy and paste the applicable URL into your browser), which will allow you to complete, sign and submit the forgiveness form electronically to German American Bank’s portal. It will also allow you to upload the required supporting payroll and non-payroll documentation as set forth on page five (5) of the 3508EZ instructions or page six (6) of the 3508 instructions.

Tips before you begin your electronic application:

1. Have all of the information and supporting documents for attachments available to you when you access the portal.If information is missing, it will delay the timing of your forgiveness application.
2. You will be asked for the SBA PPP Loan Number and the German American Bank PPP Loan Number, which are the same and can be found on your original loan document.
3. The system will not save uncompleted applications, yet you will be able to exit out and start the electronic application process again.

For 3508EZ Forgiveness Application:  https://germanamerican.com/3508EZ

Form 3508 Forgiveness Application:  https://germanamerican.com/3508

You will receive confirmation from German American Bank when your complete forgiveness application has been reviewed and successfully submitted into the SBA portal. You may receive follow up questions or requests for clarifications or additional information from us before we finalize your forgiveness application submission. Please note that the SBA ultimately has to approve your forgiveness application after our submission. The SBA has 90 days to accept and make forgiveness payment. We will notify you of the forgiveness amount after it is remitted to us by the SBA. Any unforgiven amount will then be repaid on the terms of your PPP note.

NOTES:

• If for any reason you do not want to apply for the PPP loan forgiveness, your PPP loan is a 1% fixed rate pursuant to the terms of your promissory note with a term of two (2) years if your loan closed on or before June 5, 2020, or five (5) years if your loan closed after June 5, 2020. There are no prepayment penalties or fees. Your first monthly payment of any loan amount which is not forgiven will be 16 months from the date you received your PPP loan funds. Originally your PPP loan was set to start repayment 6 months from the date you received your PPP loan funds.