Alaska has the SHARP II – Health Care Professions Loan Repayment and Incentive. State Loan Forgiveness Programs. Alongside the above national programs, many states also offer programs for their residents. In many states, independent loan repayment plans are also available. The Association of American Medical Colleges provides a list of individual state loan repayment programs.
By Ken TysiacA new, free tool developed by the AICPA and fintech lender Biz2Credit is designed to help borrowers and their CPA advisers complete the forgiveness application for Paycheck Protection Program (PPP) loans.
Available at PPPForgivenessTool.com, the dynamic platform automates the forgiveness process for small business owners who received funds from the PPP. The tool incorporates the PPP forgiveness calculator developed by the AICPA and is available to any business approved for a PPP loan, regardless of the lender it worked with to receive funding.
Borrowers or their CPA advisers can use the tool to fill out the forgiveness application. The tool will produce all government-required forms automatically. The PPP applicants will be able to electronically sign the SBA Form 3508, PPP Loan Forgiveness Calculation Form, or Form 3508EZ, and the required source documents will be saved into a downloadable file that can be provided to PPP lenders.
The AICPA estimates that the tool will save hours of manual work for any applicant going through the PPP loan forgiveness process. Final Treasury and U.S. Small Business Administration (SBA) FAQs on PPP forgiveness are expected to be released soon, and the PPP loan forgiveness tool will be updated to reflect any new changes. Based on this, the AICPA recommends that borrowers and CPA firms wait for the final guidance before generating the final signed Form 3508.
CPA.com, the AICPA’s business and technology arm, helped develop the tool. The tool’s platform was developed by fintech lender Biz2Credit. The objective is to drive a simple, effective forgiveness process, said Erik Asgeirsson, president and CEO of CPA.com.
“Our broader goal with this tool is to also help drive a common approach to this process with the payroll and lender communities,” Asgeirsson said in a news release.
The open architecture of the platform enables easy integration into the forgiveness tool. Payroll providers and other companies that hold small business data are able to automate the import of source data they hold, such as payroll reports, increasing the speed with which businesses can complete their forgiveness applications.
More information on the tool is available at PPPForgivenessTool.com. In addition, videos are available providing a brief overview of the tool for borrowers and how CPA firms can use the platform.
The PPP in brief
Congress created the PPP as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. The legislation authorized Treasury to use the SBA’s 7(a) small business lending program to fund forgivable loans of up to $10 million per borrower that qualifying businesses could spend to cover payroll, mortgage interest, rent, and utilities.
The loans are available to small businesses that were in operation on Feb. 15 with 500 or fewer employees, including not-for-profits, veterans’ organizations, Tribal concerns, self-employed individuals, sole proprietorships, and independent contractors. Businesses with more than 500 employees in certain industries also can apply for loans.
Congress designed the loans to support organizations facing economic hardships created by the coronavirus pandemic and assist them in continuing to pay employee salaries. PPP loan recipients can have their loans forgiven in full if the funds were used for eligible expenses and other criteria are met. The amount of the loan forgiveness may be reduced based on the percentage of eligible costs attributed to nonpayroll costs, any decrease in employee headcount, and decreases in salaries or wages per employee.
The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the pandemic, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.
— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.
Disclaimer: SBA.com® is a private website and has no affiliation with any government agency. See our Advertiser Disclosure. For nearly 10 years, SBA.com® has provided small business advice and resources. We pride ourselves in providing clear, conspicuous, and truthful information regarding the services that we offer.
Thank you for visiting our PPP Loan Forgiveness Calculator!
In order to apply for loan forgiveness for the PPP program, you are required to complete the U.S. Small Business Administration Form 3508. This form can be complex, and in an effort to help businesses navigate through the forgiveness process, we have developed a tool that will walk you through the process and help calculate your forgiveness amount and other relevant information needed to complete your official form. You are not required to use our calculator or advice. We are not providing legal advice. We are not a lender.
To download SBA.com®’s Loan Forgiveness Calculator, you will need Microsoft Excel or similar spreadsheet program that is able to open .XLSX files. The workbook is broken out into multiple tabs that you will have to click through to complete.
If you’re ready to start:
Download a blank version of SBA.com®’s Loan Forgiveness Calculator here.
If you’d like to see a sample completed workbook:
Download a sample completed version of SBA.com®’s Loan Forgiveness Calculator here.
Forgiveness rules are likely to change in the near future. As such, the calculator you download today may eventually be updated. Sign-up below to receive future updates of our Forgiveness Calculator sent directly to your inbox.
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Once you have completed the workbook, you will need to download and complete the U.S. Small Business Administration Form 3508 with the information generated, and submitted to your PPP lender. Reminder: SBA.com® is not a lender. Please do not submit any documents to SBA.com®.
Thank you for visiting our PPP Loan Forgiveness Calculator! In order to calculate your forgiveness amount you need to take the following steps:
- Step 1: Record the sum of your (1) Payroll costs, (2) Mortgage Interest payments, and (3) Utility costs
- Step 2: Subtract the total amount of salary/hourly wage reductions from this number
- Step 3: Multiply this number by the FTE Reduction Quotient (Schedule A, line 13)
- The result is OPTION 1
- Step 4: Record your PPP Loan Amount
- This is OPTION 2
- Step 5: Divide your payroll cost by .75
- The result is OPTION 3
- Step 6: Your PPP Loan forgiveness amount will be LESSER between Options 1, 2 and 3.
Here are some examples of how you can calculate your forgiveness amount with this methodology:
Example 1:
- A. Payroll Costs: $100,000
- B. Mortgage Interest, Lease, Utility Costs: $50,000
- C. Total Salary/Hourly Wage Reductions: $25,000
- D. FTE Reduction Quotient (Schedule A, line 13): .85
- E. Modified Total (( A+ B – C) x D): $106,250
- F. PPP Loan Amount: $100,000
- G. Payroll Cost 75% Requirement (A / .75): $133,333
- H. Final Forgiveness Amount (Smallest of E, F, G): $100,000
Example 2:
- A. Payroll Costs: $450,000
- B. Mortgage Interest, Lease, Utility Costs: $50,000
- C. Total Salary/Hourly Wage Reductions: $400,000
- D. FTE Reduction Quotient (Schedule A, line 13): .7
- E. Modified Total (( A+ B – C) x D): $70,000
- F. PPP Loan Amount: $450,000
- G. Payroll Cost 75% Requirement (A / .75): $600,000
- H. Final Forgiveness Amount (Smallest of E, F, G): $70,000
Example 3:
- A. Payroll Costs: $100,000
- B. Mortgage Interest, Lease, Utility Costs: $50,000
- C. Total Salary/Hourly Wage Reductions: $5,000
- D. FTE Reduction Quotient (Schedule A, line 13): .5
- E. Modified Total (( A+ B – C) x D): $72,500
- F. PPP Loan Amount: $125,000
- G. Payroll Cost 75% Requirement (A / .75): $133,333.33
- H. Final Forgiveness Amount (Smallest of E, F, G): $72,500
It is absolutely essential to remember that the information on this sheet is for illustrative purposes only and accuracy is not guaranteed. The values and figures shown are hypothetical, may not be applicable to your individual situation and may not represent the most recent guidance published by the U.S. Small Business Administration. Be sure to consult with your bank, lender and/or qualified professional advisor and do not rely solely on the accuracy of the information inside.
SBA.com® is not associated with SBA.gov and is a private business providing resources for small businesses.