PPP Loan Forgiveness — Online Application Coming

At Frost, we are proud to have helped many of our customers secure funds through the SBA’s Paycheck Protection Program (PPP) in order to help keep their businesses operational during these extraordinary times. If you received a loan through the SBA’s PPP, you may be eligible to request loan forgiveness.

Our PPP borrowers will be able to complete an online version of the SBA’s forgiveness application, which will ensure a quicker and more convenient experience than filling out a paper application. We will update this webpage once the Frost loan forgiveness online application portal is available. Frost is not yet accepting loan forgiveness applications but in the interim, we strongly recommend that you begin reviewing the application and become familiar with it, as it will be used during the online application process. You should also start gathering the required documentation listed below.

Determine which application is right for you and become familiar with it

You will need to complete a loan forgiveness application and submit it to the financial institution that funded your loan. The SBA has provided two different applications. The EZ version of the loan forgiveness application requires fewer calculations for eligible borrowers.

To see which application is right for you, answer the quick questionnaire below:

FIND THE RIGHT APPLICATION

Before applying, gather your required documentation

Having your required documentation ready will be imperative to submitting your forgiveness application successfully. Please note, the required documentation will be the same regardless of which application you use. You will need to upload documentation during the online application process. Detailed information about the documents that will be required at the time of application can be found below:


Documents verifying the eligible cash payroll payments from the Covered Period or Alternative Payroll Covered Period consist of the following:

Option 1. Third-party payroll report
Option 2. Form 941 reported or that will be reported
Option 3. Internal payroll report or bank statements


Documents verifying the eligible non-cash payroll payments from the Covered Period or Alternative Payroll Covered Period of the following:

Within Texas:
Option 1. Unemployment insurance tax filings reported or that will be reported
Option 2. Account statements
Option 3. Payment receipts or Cancelled checks

Outside of Texas:
Option 1. State quarterly business and individual wage reporting, reported or that will be reported AND/OR Unemployment insurance tax filings reported or that will be reported
Option 2. Account statements
Option 3. Payment receipts or Cancelled checks


Documents verifying the eligible cash compensation to an owner-employee, a self-employed individual or general partner from the Covered Period or Alternative Payroll Covered Period consisting of each of the following:

  • 2019 Tax Form 1040 Schedule C
  • 2019 Tax Form 1040 Schedule F
  • 2019 Tax Form 1065 Schedule K1

If you are using the 3508 EZ application, you must upload one document showing the number of FTEs on January 1, 2020 and another one showing the number of FTEs at the end of your selected covered period.

If you are using the 3508 application, you must upload one of the following documents showing the average number of FTE employees on your payroll per week:

  • Form 941 reported or that will be reported
  • State quarterly business and individual employee wage reporting, reported or that will be reported
  • Unemployment insurance tax filings reported or that will be reported

Your documents must cover one of the following date ranges:

Option 1. February 15, 2019 and June 30, 2019
Option 2, January 1, 2020 and February 29, 2020
Option 3. If you are a seasonal employer, you can choose from the timeframes above or any consecutive 12-week period between May 1, 2019 and September 15, 2019


Documentation verifying existence of the mortgage which includes February 15, 2020, eligible payments from the Covered Period and one month after the Covered Period ends consist of:

Option 1. Lender account statements showing amount owed and paid
Option 2. Lender account statements showing amount owed AND Payment receipts or Cancelled checks
Option 3. Lender amortization schedule AND Payment receipts or Cancelled checks


Documentation verifying existence of the rent or lease which includes February 15, 2020, eligible payments from the Covered Period and one month after the Covered Period ends consist of:

Option 1. Account statements or invoices showing amount owed and paid
Option 2. Account statements showing amount owed AND Payment receipts or Cancelled checks
Option 3. Copy of entire rent or lease agreement AND Payment receipts or Cancelled checks


Documentation verifying existence of the utility prior to February 15, 2020, eligible payments from the Covered Period and one month after the Covered Period ends consist of:

Option 1. Account statements or invoices showing amount owed and paid
Option 2. Account statements showing amount owed AND Payment receipts or Cancelled checks
Option 3. Invoices showing amount owed AND Payment receipts or Cancelled checks


LOAN FORGIVENESS FAQs

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, documentation necessary to support the Borrower’s loan forgiveness application, and documentation demonstrating the Borrower’s material compliance with PPP requirements.

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.


In order to qualify for loan forgiveness, a borrower must use their PPP loan for forgivable purposes as described below and employee and compensation levels must be maintained or, if not, an applicable safe harbor must apply. The actual amount of loan forgiveness will depend, in part, on the total amount of payroll costs, payments of interest on mortgage obligations incurred before February 15, 2020, rent payments on leases dated before February 15, 2020, and utility payments for service that began before February 15, 2020, over the loan forgiveness covered period.

However, to receive full loan forgiveness, a borrower must use at least 60 percent of the PPP loan for payroll costs, and not more than 40 percent of the loan forgiveness amount may be attributable to nonpayroll costs.


You will need to complete the SBA’s Paycheck Protection Program Loan Forgiveness Application and submit it to the financial institution that funded your loan. Our PPP borrowers will complete an electronic version of the application through the Frost PPP Loan Forgiveness online portal. We will notify our customers via email and update this website once the online application portal is available.


No, there are no prepayment penalties or fees.


Any remaining principal balance and applicable accrued but unpaid interest must be repaid. Payments will begin six months following the loan disbursement. Interest on the remaining principal balance will accrue at the rate of 1%. The total remaining principal will be re-amortized and principal and all accrued and unpaid interest must be repaid within two years of the initial loan disbursement.


If you submit to your loan forgiveness application within 10 months after the end of your loan forgiveness covered period, you will not have to make any payments of principal or interest on your loan before the date on which SBA remits the loan forgiveness amount on your loan to your lender (or notifies your lender that no loan forgiveness is allowed). Your “loan forgiveness covered period” is the 24-week period beginning on the date your PPP loan is disbursed; however, if your PPP loan was made before June 5, 2020, you may elect to have your loan forgiveness covered period be the eight-week period beginning on the date your PPP loan was disbursed. In no event, however, will the loan forgiveness covered period end after December 31, 2020.


Frost will notify you of remittance by SBA of the loan forgiveness amount (or notify you that SBA determined that no loan forgiveness is allowed) and the date your first payment is due. Interest continues to accrue during the deferment period. If you do not submit your loan forgiveness application within 10 months after the end of your loan forgiveness covered period, you will begin paying principal and interest after that period. For example, if your PPP loan is disbursed on June 25, 2020, the 24-week period ends on December 10, 2020. If you do not submit a loan forgiveness application by October 10, 2021, you will begin making payments on or after October 10, 2021.


Frost cannot provide financial, legal or tax advice, including interpretation of the SBA’s rules or guidance for loan forgiveness, or how they may apply to the circumstances of your business. Please seek financial, legal or tax advice from your financial, legal and/or tax professional(s). Please note that the information above is taken directly from the SBA and/or the SBA Paycheck Protection Program Loan Forgiveness Application, and is posted here solely for your convenience. It is not intended to be, and should not be considered, comprehensive or definitive. Please be sure to consult the SBA and/or U.S. Treasury PPP websites for information related to loan forgiveness and the PPP program. Guidance and rules directly from the SBA and/or the U.S. Treasury will supersede and control over any information below or in any FAQ posted here, to the extent of any conflict.

Please continue to check back here for the latest information about how and when to apply for loan forgiveness. In the meantime, you can visit the SBA’s website for additional important details and conditions on loan forgiveness.