These questions and answers are a compilation of the participant Q&A from YPTC and Network for Good’s webinar on Feb. 15, 2021.

Questions on Timing of Application:

What if the loan forgiveness portal is currently not available from first PPP loan lender and I cannot apply for forgiveness?

You do have to wait but you can still apply for Round 2 in the interim as long as you have spent all PPP Round 1 funds on eligible expenses.

When can I apply for forgiveness of the second round?

You have to apply for loan forgiveness within 10 months of the end of the covered period of your loan. You cannot apply for loan forgiveness of a PPP2 loan before a PPP1 loan (but you can file for forgiveness at the same time).

We received the funds on April 24 2020.  Should we have applied for forgiveness in Oct which would have been the 24 weeks?

If you received your PPP1 loan funds on 4/24/20, then your allowable 24-week covered period would run through 10/8/20. You will need to apply for loan forgiveness within 10-months of 10/8/20 (8/8/21).

If we have not yet applied for PPP1 forgiveness (bank is not yet accepting forgiveness applications), can we add the new forgivable expenses to our PPP1 forgiveness calculations?

Yes you can add the new expenses.

Related to non-payroll costs, is the time frame limited to 8 weeks only?

No, you can choose your covered period (8 to 24 weeks).

We are non-profit company and we have followed all the guidelines accordingly. All the supporting documents regarding payroll, rent and other expenses were provided to the lender. At first they came up with a difference of $ 3,000 and but after providing them detailed calculations in excel, they verified the amount and $ 99k should be forgiven. Please advise how much time it will be taken to be forgiven and who will be sending the confirmation. Thanks!

Reword this question?

Confirmation will come from your lender.  A lender has 60 days from receipt of a complete application to issue a decision to SBA.  From there the SBA has 90 days to remit any forgiveness amount to the lender.

Is the forgiveness for loan2 due the same day as the forgiveness for loan 1?

Yes, the same rules apply (10 months after your covered period) except that if the documentation supporting the 25% revenue reduction was not supplied at the time of application, it will need to be supplied at the time loan forgiveness is requested.

Our loan was granted in early April and our covered period is in early September, but there is a notice in our loan account with our lender that says a payment is due on February 1st – is that correct?  10 months from early September is early July.

It sounds like your lender hasn’t updated your file since the new guidance was issued.

Questions About Eligible Costs:

On the form it says Gross payroll. Where do you write in the other expenses covered?

To apply for a loan, you need to use your average monthly payroll costs.  When applying for loan forgiveness, there will be separate entries for payroll and the various eligible nonpayroll costs. You should maintain separate schedules to support the figures on your applications.

If I have more than enough payroll cost when applying for forgiveness, do I need to even bother including the non- payroll costs as part of the forgiveness package?

You do not have to include anything beyond your loan amount and if that is covered by payroll alone that makes life easy.  HOWEVER, you want to consider if you are eligible for the employee retention credit and whether you want to allocate any of that payroll to the ERC.

What are the acceptable “Look Back Periods”?

They will be the same as the first round of PPP.

To recap… if you received PPP1 in May, you cannot use payroll from March or April 2020 even though we were operating in shutdown.?

Correct, covered period is subsequent to when you receive the funds.

What are supplier costs?

Supplier costs are expenditures for essential goods made pursuant to a contract or PO in effect any time before your loan’s covered period.  If the goods were perishable, the contract or PO can be in effect any time during your covered period.

If the operation expenses includes software costs that were necessary for a fundraising event as opposed to ongoing operations (e.g. accounting) are they still eligible for use?

We think it would be, since it helps your organization to track donor records and contributions (which are an important business operations component of nonprofits).

Would our donor database cost be a covered expense? We previously used desktop software for our donor/program participant database but had to switch to a cloud-based database since we were all suddenly remote. Is that cloud database expense applicable for PPP?

We think it would be, since it helps your organization to track donor records and contributions (which are an important business operations component of nonprofits).

Would NFG expenses qualify for the software or cloud services expense provision?

We think it would (see answers above).

Re software would upgrading an existing web site be an eligible cost? Same for rebuilding software used for volunteer and/or staff scheduling?

No to the website expenditures.  Yes to the scheduling software expenditure.

Would a roof repair/replacement on a church qualify for the property category?

If the damage was due to public disturbances that occurred during 2020 and were not covered by insurance.

We haves semi-monthly payroll and date of loan disbursement was in between PR payment dates. Can you accrue the 1st days of PR that are not included in the covered period but are paid within covered period ?

Good news: the SBA clarified that payroll costs include those paid during the covered period, or incurred during the last pay period of the covered period if paid on or before the next regular payroll date.

With regard to worker protection expenditures, would mental well-being endeavors (whether one-on-one or group -therapy – virtual) be eligible?

Probably not.  While worker protection expenditures do include onsite and offsite health screening, these screenings are defined as those related to COVID-19 sanitation or safety requirements.

After we had already been granted the PPP it was finalized that contractors should not be included.  We paid our contractors with no reduction through the entire covered period, but we are applying for forgiveness only including payroll staff, excluding contractors. So we are not asking for full loan forgiveness.  Our loan was less than 50K.  Which forgiveness form do we need to use?

You may use Form 3508S (for loans of $150K or less) and on the line marked “Requested Loan Forgiveness Amount” you would only include the amount for which you are seeking forgiveness.

Questions About FTEs:

For PPP2 loans which periods will be used for FTE calculations to determine forgiveness? If we laid off one employee on 1/1/21, and we used 2020 payroll for the application, will that one layoff affect forgiveness?

The same reference periods used for PPP1 will be used for PPP2.

To “restore” FTE, what time period should be used prior to 12/30/21, e.g. a week, month, payroll time period?

It is your average weekly full-time equivalency during your covered period. Here are the instructions from the loan forgiveness application: “for each employee, enter the average number of hours paid per week, divide by 40, and round the total to the nearest tenth. The maximum for each employee is capped at 1.0. A simplified method that assigns a 1.0 for employees who work 40 hours or more per week and 0.5 for employees who work fewer hours may be used at the election of the Borrower.”

What is lookback timeframe for loan forgiveness?

If you mean for calculating FTE, the borrower may choose the average number of FTE employees on payroll per week between a) 2/15/19-6/30/19, b) 1/1/20-2/29/20, or c) for seasonal employers either of the above or any consecutive 12-week period between 2/15/19-2/15/20.  If you mean for calculating any salary or hourly wage reductions, the lookback period is the most recent full quarter before your covered period.

We had to lay off our only employee 12/31/20 and have plans to rehire in February-March so will have a 1-2 month gap. Will that gap in payroll impact eligibility?

It shouldn’t impact your loan forgiveness if the end of your covered period falls before 12/31/20.

If you received a PPP loan in 2020 and your payroll is smaller in 2021 as an employee left, what are the ramifications of that?

Voluntary employee resignations do not impact loan forgiveness.  There is a space on the PPP Schedule A Worksheet (of the Form 3508 loan forgiveness application) to include reduction exceptions such as these.

If we had a reduction in force since 2019, are we still eligible for round 2?

If your organization was otherwise eligible for the first draw, you should be eligible for the second draw, provided you had a reduction in gross receipts of at least 25%.

For PPP forgiveness, is an FTE also defined as at least 30 hrs/week?

No, the SBA directs borrowers to divide by 40 (and round the total to the nearest tenth) when calculating a full-time equivalency.  The SBA also allows a borrower to use a simplified method that assigns a 1.0 for employees who work 40 hours or more per week and 0.5 for employees who work fewer hours.

Under $50k Loan and Other General Questions:

If our PPP loan was less than $50,000 will we automatically receive blanket forgiveness? The bank is asking for all documentation.

No, but the process and the forgiveness application are streamlined.  See next question below.

Is there is blanket forgiveness for loans under $50K?  What does that mean?

It means that PPP loans of $50K or less may submit for loan forgiveness using the short form (Form 3508S) and do not have to provide any calculations for FTE and/or salary/hourly wage reductions (they still have to submit support for their eligible expenses, it’s just an easier application process).  Keep in mind that borrowers with loans more than $50K that are subject to FTE and/or salary/hourly wage reductions must follow Form 3508 to calculate their loan forgiveness amount.  The short form is available from the SBA website:

If your loan is less than 50K can you still use the EZ form?

No, you would need to use the 3508S Form

Is the blanket forgiveness for 50k or under 150k?

PPP loans of $50K or less do not need to provide any calculations for salary or hourly wage reductions, or FTE reductions.

We borrowed under $50K in the first draw.  What is the ‘blanket forgiveness’ that was mentioned for loans under $50K?  Does that mean I don’t need to apply for forgiveness anymore?

Any entity wishing to receive loan forgiveness must apply using one of the loan forgiveness applications.  Entities with PPP loans of $50K or less may apply using Form 3508S and will not need to supply any other documentation at the time of application but that doesn’t clear a borrower from maintaining documentation to support payroll and nonpayroll expenditures that were paid using PPP loan proceeds.  Keep in mind that the SBA reserves the right to review or audit any loan – of any amount – at any time.

“Closed by Government Order”- does that include state and local or only federal?

Yes, generally.

We are concerned about paperwork, as we’ve gotten confusing info from our bank about forgiveness application.

Good news – the SBA has updated the PPP loan forgiveness applications and the instructions provide a list of what documentation should be submitted with the application and what should be maintained.  You can find the loan forgiveness applications on the SBA website at –

Will we be able to apply for forgiveness on both draws at once?

This is a question for your lender; we’re not sure if the lender portals would allow this.

What do we need to provide if we apply for forgiveness and claim exemption #2?

Entities that check the second exemption box on page 1 of the Form 3508EZ instructions will be asked to submit documentation supporting “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.”  In other words, checking the second box on the EZ application does not clear a borrower from providing FTE information.

What is the number for the 3rd forgiveness form for loans of $150,000 or less?


What do we put in the place of the “owner” on the application?

Please ask your lender to clarify.  It may vary by lender.

What are the options if the organization missed deadline for applying forgiveness?

Most likely, you have not yet missed the deadline.  For example, entities who received a PPP loan as early as April 2020 have at least until the end of March 2021 to submit a forgiveness application. Borrowers have 10 months from the last day of their covered period to apply for forgiveness.