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PPP forgiveness: 3 sets of supporting documents every borrower needs

COVID-19 Articles

image of clipboard that says ppp loan forgivenessMany businesses have already spent their Paycheck Protection Program loans or are getting close. Now, they need to focus on documenting their expenditures to qualify for maximum loan forgiveness.

To date, the Small Business Administration (SBA) has issued only limited guidance on the documents that borrowers must produce when applying for forgiveness. Plus, each lending bank can demand additional records.

How should you round up the right documents? It’s different for every entity but essential supporting documentation boils down to three key categories: Payroll, Full-Time Equivalent employees, and Non-Payroll expenses.

1. Payroll

Payroll support and documentation help banks verify eligible cash compensation. Documents may include:

  • Form 3508 (Paycheck Protection Program Loan Forgiveness Application) and PPP Schedule A.
  • Bank account statements or third-party payroll service provider reports documenting cash compensation paid to employees.
  • Payment receipts, canceled checks, or account statements documenting employer contributions to employee health insurance and retirement plans (if included in the forgiveness amount requested).

2. Full-time equivalent (FTE)

Banks may also ask for various FTE supporting documentation, which could include:

  • The average number of FTE employees on payroll per week between 2/15/2019 and 6/30/2019, and between 1/1/2020 and 2/29/2020.
  • For seasonal employers, the average number of FTE employees on payroll per week between 2/15/2019 and 6/30/2019; 1/1/2020 and 2/29/2020; OR any consecutive 12-week period between 5/1/2019 and 9/15/2019.
  • Additional documentation may include:
    • Payroll tax filing reported or to be reported.
    • IRS forms (941 or equivalent).
    • AND state quarterly business and individual employee wage reporting and unemployment insurance tax filings.


3. Non-payroll

Borrowers might have to produce additional non-payroll support for any PPP expense not applied to compensation-related costs. Documents may include:

  • Business mortgage interest payments.
    • Copy of amortization schedule and receipts or canceled checks documenting eligible payments OR lender account statement from February 2020 through one month after the covered period ends. These documents verify interest amounts and payments.
  • Business rent or lease payments.
    • Copy of a current lease and receipts or canceled checks for payments during the covered period OR lessor account statements from February 2020 through one month after the covered period ends.
  • Business utility payments.
    • Copy of invoices or bills from February 2020 and those paid during the covered period, and receipts, canceled checks, or account statements.

Documents on file

Borrowers will also want to maintain supporting documentation for their own records and retain the records for at least six years after the date the loan is forgiven or repaid in full.

They include:

  • All documents provided to the bank, and all records related to the PPP loan, including loan and forgiveness applications.
  • Supporting documentation for:
    • Schedule A worksheet table 1 and 2 (Loan Forgiveness Application).
    • Job offers made and refused, firings for cause, voluntary resignations, employee requests for reductions in hours, and any inability to hire similarly qualified employees by 12/31/2020.
    • Proof of inability to operate at the same level of business due to compliance with HHS, CDC, or OSHA rules on sanitation, social distancing, or any other work or customer safety requirement related to COVID-19, if applicable.
    • Certification of FTE Reduction Safe Harbor 2, if applicable.

The forgiveness timeline

The SBA has issued the following forgiveness timeline to help PPP recipients seeking loan forgiveness:

  • For each complete forgiveness application, lenders have 60 days to submit their recommendations to the SBA. Lenders can recommend total or partial forgiveness or full denials.
  • The SBA has 90 days to give each lender a response, forgiven funds, and interest.
    • The SBA will reduce the forgiveness amount by the amount of any EIDL advance. Lenders should NOT include that figure in their calculations.
    • If the SBA is reviewing the loan, it will issue an approval, denial, or denial without prejudice.
  • Lenders communicate SBA’s decisions to borrowers.
  • Borrowers who disagree with their lenders’ determinations can request SBA review. Lenders must notify SBA of requests for review within five days.

Navigating the process

Unknowns still circle the PPP loan forgiveness process. Talking to your lender in advance about the supporting documentation will help prevent grief later.

Our team is keeping track of the latest information and guidance. We are here to work with you and your company to help you get the full benefits provided by COVID-19 economic relief and any other changes made by federal or state governments during and after the pandemic.

Boyer & Ritter can help you navigate through compliance requirements of the loan forgiveness program, to help ensure maximum forgiveness is received, and provide a reliable and trusted source of information for your lender and the government. To learn more about engaging us for PPP Loan Forgiveness Support Services and assistance in determining the level of support you may need, please contact us HERE.


Mark W. Banks, CPA, is a supervisor at Boyer & Ritter LLC and a member of the firm’s Forensic, Litigation and Consulting Group. Mark is also a member of the firm’s COVID-19 Task Force.  Contact Mark at 717-761-7210 or


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