PPP Loans: Keep or Return the Money? Forgiveness Questions Play a Factor

Treasury and the Small Business Administration continue to define and finalize the rules for Paycheck Protection Program loan forgiveness which makes loan forgiveness a moving target. Small businesses need to understand the amount of forgiveness that will be applied to their loans under the current rules. Using a free loan forgiveness guide and calculator developed by the Wisconsin Bankers Association and its subsidiary, FIPCO, borrowers can begin to understand the potential amount of PPP loan forgiveness.   

The free WBA guide in pdf form is downloadable at https://www.wisbank.com/articles/2020/04/wba-ppp-loan-forgiveness-guide

The free WBA/FIPCO calculator in pdf form is downloadable at https://www.wisbank.com/articles/2020/04/wba-fipco-ppp-borrower-forgiveness-calculator

“Lenders and borrowers alike want more guidance on PPP loan forgiveness because the decisions they are making now will affect their businesses for the next two years,” said Rose Oswald Poels, WBA president/CEO. “Our free loan forgiveness guide and calculator are the tools needed to help provide some clarity.” 

“There were expectations and assumptions by borrowers and lenders alike when PPP was first launched which may have changed,” explained Oswald Poels. “One great example would be originally it was expected that funds would be disbursed as needed. Since then, it’s been clarified that the funds need to be disbursed within 10 days of the loan. That makes a huge difference from both the borrower and the lender viewpoint.” 

Forgiveness isn’t automatic. It is the borrower’s responsibility to follow the criteria of the loan to ensure forgiveness.   

“Borrowers really need to be aware they need to track and document the use of the PPP funds,” said Oswald Poels. “Bankers want these loans to be forgiven, but whether that happens rests squarely on the shoulders of the borrower.” 

“Timelines and payroll calculations will play a role in the level of loan forgiveness,” explained Oswald Poels. “We suggest borrowers work with their bankers and use this guide and the calculator to help stay within the requirements of the program.”    

Here are the top items PPP recipients should keep in mind.  

  • Track your use of the PPP loan funds.   
  • Document and report on your fund use when applying for loan forgiveness.  
  • At least 75% of PPP funds must be used for payroll costs.  
  • 8 weeks after you have received your PPP loan funds, you can submit a forgiveness request to the lender servicing the loan.  
  • Stay in regular contact with your banker.  


The free WBA guide in pdf form is downloadable at https://www.wisbank.com/articles/2020/04/wba-ppp-loan-forgiveness-guide

The free WBA/FIPCO calculator in pdf form is downloadable at https://www.wisbank.com/articles/2020/04/wba-fipco-ppp-borrower-forgiveness-calculator

By, Eric Skrum