Get Help With Your Application

Organizations that obtained Paycheck Protection Program funding through the CARES Act can have their loans forgiven, turning them into grants. To qualify, each borrower must file a forgiveness application with its PPP lender, proving that it followed the rules. If your church, school, college, or camp meets all the criteria, 100% of its loan can be forgiven.

The process of seeking PPP loan forgiveness has been complicated by evolving guidance and ongoing changes to the rules. It can be hard to know where to start. We’ve compiled the following steps to help your church, school, or nonprofit ministry apply for PPP loan forgiveness.

Note: The $900 billion relief package Congress passed in December 2020 changed several provisions of the PPP loan program. We are expecting to hear additional information from the U.S. Small Business Administration as it implements these changes. Stay tuned. For information about the latest stimulus package, read COVID-19 Relief Act, Round Two Highlights.

Step 1: Gather documentation

You’ll need the following information in order to complete the PPP loan forgiveness application. Your lender may require additional documentation.

• PPP Loan agreement
• PPP Disbursement details
• PPP Loan Forgiveness Calculation Form (SBA Forms 3508, 3508EZ, or lender’s equivalent)
• PPP Schedule A
• Documents verifying cash & benefit compensation during the covered period
• Bank account statements or third-party payroll reports
  • Payroll tax filings (often IRS Form 941)
  • Quarterly state payroll, income, and unemployment insurance filings
  • Employer's contribution to employee health insurance & retirement
  • Customers of MinistryWorks^® can run payroll reports from their account dashboard or reach out to their dedicated payroll specialist for assistance.
• Documents verifying number of full-time employees & number of hours worked. You may elect one of the following reference periods:
  • Between 2/15/2019 and 6/30/2019
  • Between 1/1/2020 and 2/29/2020
  • Note: Seasonal employers may select other time periods
• Eligible business mortgage interest, rent, and/or utility payments
  • Documents that verify services are currently active
  • Documents that verify payments were made

These documents must be submitted with the PPP loan forgiveness application. The program requires your ministry to keep additional records on file. For details, see the SBA’s PPP Loan Forgiveness Application Instructions for Borrowers.

Step 2: Contact your lender

Before completing a PPP loan forgiveness application, we strongly urge you to contact your PPP lender. Some banks and credit unions have developed their own software to process loan forgiveness applications. If your lender is among them, it may not accept a paper version of the application or another organization’s loan forgiveness software tool.

Contact the lender that issued your ministry’s PPP loan. Ask:

• When will the lender start processing PPP loan applications?
• Will the lender accept paper applications?
• Will the lender allow borrowers to use PPP loan forgiveness software created by others?

Step 3: Seek guidance from a trusted financial advisor

We encourage you to check with a trusted local bank, financial advisor, or auditor if you’re unsure about how to answer any questions that arise while preparing to seek PPP loan forgiveness. They would be best suited to meet your ministry’s unique needs.

Step 4: Determine if you qualify for 100% forgiveness

Loans can be fully forgiven if at least 60% of the funds were used for payroll costs, and the remaining amount was spent on qualified expenses such as mortgage, rent, and utility expenses.

During the period covered by the loan, did you:

• Maintain your employee count or resume it within the safe harbor period?
• Keep salary and wages at 75%-100% of pre-pandemic levels?
• Use at least 60% of loan funds for payroll?
• Spend the remaining loan amount on qualified expenses (mortgage, rent, utilities)?

If you answered “Yes” to all of the questions above, your ministry should qualify for full forgiveness. You can use the SBA’s simple loan forgiveness application: 3508EZ.

Step 5: Calculate how much of your loan must be repaid

If you answered “no” to any of the questions above, your ministry may need to repay some portion of its PPP loan. It can be complicated to determine the exact amount that must be repaid. In addition to talking with a financial advisor, you could also:

• Seek detailed guidance on PPP loan forgiveness. Resources to consider:
  • Guide to PPP Loan Forgiveness. This four-page download from the U.S. Chamber of Commerce offers a simple framework to help you get started. Free.
  • Applying for PPP Loan Forgiveness. This article from Church Law & Tax provides detailed instructions to help ministries convert the maximum amount of a PPP loan into a nontaxable grant. Free.
  • PPP Loan Forgiveness Updates: Cutting Through the Confusion. This 90-minute webinar from the Evangelical Council on Financial Accountability (ECFA) gives ministries helpful, step-by-step guidance from CPA Michael Batts. Includes a 13-page handout. Free.
• Use a PPP loan forgiveness calculator. A growing number of firms are developing software solutions that help borrowers do the math required for loan forgiveness. Your bank may be among them. Be sure to ask.
• Consult the FAQs. The U.S. Treasury Department and SBA have answered hundreds of questions since they began issuing guidance on the PPP program. Find the FAQs.

Step 6: File the application

The SBA was to begin processing loan forgiveness applications in early August. Banks were expected to start accepting loan forgiveness applications soon afterward. Verify that your lender will accept the loan forgiveness application that you intend to complete, if it differs from the SBA or lender’s version. Complete the application, attach all required documentation, and submit it to your lender.

Additional Resources

• PPP Loan Forgiveness – A Summary of Available Guidance [NonprofitCPA] 
• Free Personal & Church Finance Resources for Ministries During COVID-19 [GuideStone] 
• PPP Loan Forgiveness Application Instructions [SBA] 
• Official program rules [Treasury] 

Posted July 2020. Updated January 7, 2021

Brotherhood Mutual is not a financial lender and does not broker loans, make loans, provide loan forgiveness, or make any credit decisions. Nothing on this website is an offer or a solicitation for a loan. This website is not an agent, representative, or broker of any lender. The information on this page does not constitute legal advice.

You are encouraged to consult a trusted financial advisor, lender, or accountant if you have questions or need assistance with seeking PPP loan forgiveness.