Apr 21, 2020

What Documents Will Be Needed to Apply for PPP Loan Forgiveness?

When the economy took a dramatic downturn as a result of the coronavirus (COVID-19) pandemic, the government stepped in and concocted several business-saving funding options to help small business owners keep their operations afloat. The great news about Paycheck Protection Program (PPP) loans is that up to 100% of the loan principal has the potential to be forgiven. However, you’ve got to use the funds in a very specific, governmentally-mandated way if you want a shot at loan forgiveness.

Approved Uses for Your PPP Loan

As you might expect, the government is rather particular about how you spend their money—especially when there’s a chance you might not have to pay it all back. To stay true to form, the SBA has a strict list of approved uses for your Paycheck Protection Program (PPP) loan.


When it comes to payroll, you may use the funds for employee compensation (salary, wages, etc.), the related state or local taxes for those employees, and paid leave. You may also use them as allowances for dismissal, healthcare benefits, and retirement benefits.

Additional Business Costs

You are allowed to use your PPP funds to cover a few additional expenses outside of the employee-focused list above. You can use the money to cover rent, utilities, and interest on certain debts—like mortgage obligations (not including prepayment or payment of principal) or other debt incurred before February 15, 2020.

NOTE: You need to be extra careful about how you spend your funds if you also received an Economic Injury Disaster Loan (EIDL) and Emergency Economic Injury Grant (EEIG). The uses between the PPP, EIDL, and EEIG are very similar, but if you accidentally use the different funds to pay for the same things, it will cause some problems. Do everything you can to keep them separate to stay out of trouble.

How to Get Your PPP Loan Forgiven

There’s a bit of a process you’ll need to endure when trying to get your PPP loan forgiven. If you were on the ball, you likely tracked all of your business expenses and are ready to get down to the nitty-gritty. 

First things first—all of your forgiveness processes and procedures should be navigated between you and your lender, so there may or may not be some varying experiences from person to person and business to business. 

Documentation Needed for PPP Loan Forgiveness

While each scenario, lender, and small business may be different, we’ve written up a basic list of what should be required when you fill out your loan forgiveness application with your lender. If you spent your PPP loan funds on items from the approved uses list, you’ll need to provide:

What Happens After the Forgiveness Period?

Whether you did everything right and didn’t receive total loan forgiveness or something else happened and you still owe money on your Paycheck Protection Program (PPP) loan, you might be uncertain about what comes next. In the event your loan isn’t entirely forgiven, any persisting amount will continue with a maximum loan term of 2 years and a fixed interest rate of 1%. The principal and interest amount will continue to be deferred for up to a total of 6 months.


While every effort is made to ensure the accuracy of information when a story is published, the coronavirus pandemic and Paycheck Protection Program (PPP) have caused details to change at a rapid pace. Additional guidance from the government may change or clarify certain aspects of the forgiveness process and could result in changes to the information contained in these pages. For the most up-to-date information, please visit the COVID-19 section of our website. For more information, you can call us at (855) 853-6346. Lendio is not responsible for and provides no warranty as to the accuracy of this content. Lendio does not provide legal, accounting or tax advice. The information and services Lendio provides should not be deemed a substitute for the advice of such professionals who can better address your specific concern and situation.

About the author

Bjolan Holyoak
Bjolan Holyoak
Bjolan Holyoak is a small business finance writer based in Utah. As a copywriter for Lendio, he fuels the American Dream by giving small business owners the information they crave. He believes that with the right panache, financial information can be as much of a "breath of fresh air" as a hike in the Utah mountains.


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