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PPP Loan Forgiveness

2020 PPP Loans over $150,000

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Updated: March 1, 2021

The most recent changes from the Small Business Administration (SBA) at the end of December 2020 included the expansion of these eligible costs:

  • Business software or cloud computing service that facilitates certain business operations.
  • Property damage due to public disturbances that occurred during 2020 that were not covered by insurance or other compensation.
  • Goods essential to the operations of the business from suppliers under contract before February 15, 2020.
  • Worker protection and facility modification including personal protective equipment, to comply with COVID-19 federal, state, or local health and safety guidelines.

Loan forgiveness is a key feature of the Paycheck Protection Program (PPP). You’re able to apply for loan forgiveness if your PPP funds were used for eligible costs under this federal program. For your convenience and safety, our forgiveness process will be available only online including electronic signature of closing documents. 

Here’s what you can expect during this phase:

  1. Borrower applies online and uploads supporting documents.  To expedite the forgiveness review process, it is very important to complete and upload the Forgiveness Worksheet.
  2. Bank of Hawaii will review the application, Forgiveness Worksheet and supporting documents.
  3. Borrower may be asked to provide missing information or correct submitted information.
  4. When the application is complete, Borrower signs documents electronically.
  5. Bank of Hawaii submits application to the SBA.
  6. Bank of Hawaii receives the loan forgiveness decision from SBA and communicates the decision to the Borrower.

As a reminder, loan payments will start approximately 17 months from your loan date (24 weeks + 11 months). For example, if your loan was in April 2020, your first payment will be due August 2021 or later. If you do not submit your loan forgiveness application before your first payment is due, you will need to begin making loan payments.

Documents to Prepare

Gather documentation and save electronic copies for applicable eligible costs.

Payroll Costs

At least 60% of the loan amount must be used for payroll costs.

To confirm payroll-related costs over the Covered Period or Alternative Payroll Covered Period

  • Bank statements with specific indications showing compensation paid to employees

or

  • Third party payroll service provider reports showing compensation paid to employees

And:

  • IRS Form 941 for Q2 2019, Q1 2020, Q2 2020, Q3 2020 (if applicable), and Q4 2020 (if applicable).

If including state and local taxes

  • State quarterly business and individual wage reporting and unemployment insurance tax filings

If including health insurance or retirement benefits

  • Payment receipts, canceled checks or account statements documenting the amount paid

Mortgage Interest Payments

  • Copy of lender amortization schedule and receipts or canceled checks verifying eligible payments over the Covered Period

or

  • Lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period indicating interest amounts and eligible payments

Rent or Lease Payments

  • Copy of current lease agreement and receipts or canceled checks verifying eligible payments from the Covered Period

or

  • Lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments

Utility Payments

Copy of invoices from February 2020 and those paid during the Covered Period and receipts, canceled checks, or account statements verifying those payments

Covered Operational Expenditures

Business software or cloud computing services that facilitate certain business operations:

  • Copy of invoices or orders indicating that these costs were incurred during the Covered Period
  • Copy of receipts, canceled checks, or account statements verifying payment

Covered Supplier Costs

Goods essential to the operations of the business from suppliers under contract before the Covered Period:

  • Copy of contracts or orders in effect prior to your Covered Period
  • Copy of invoices or orders incurred or paid during the Covered Period
  • Copy of receipts, canceled checks, or account statements verifying payment

Covered Worker Protection Expenditures

Worker protection and facility modification including personal protective equipment, to comply with COVID-19 federal, state, or local health and safety guidelines.

  • Copy of invoices or orders indicating that these costs were incurred during the Covered Period
  • Copy of receipts, canceled checks, or account statements verifying payment
  • Documentation that these items were to comply with COVID-19 federal, state, or local health and safety guidelines during the Covered Period

Program Requirements

 

Who May Qualify

PPP Loans may be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

Loans may qualify for full loan forgiveness if the all of the following are met during the Covered Period:

  • Employee and compensation levels are maintained (or an eligible exception applies)
  • The loan proceeds are spent on payroll costs and other eligible expenses
  • At least 60 percent of the proceeds are spent on payroll costs

Covered Period

You may select a Covered Period between 8- to 24-weeks. The Covered Period starts on the date your loan funds are disbursed. In order to receive loan forgiveness, your business must use the PPP funds for eligible expenses during the Covered Period.

SBA Guidelines

Review the latest Small Business Administration guidelines at sba.gov/ppp on requirements for loan forgiveness as these terms are set through the federal program. Due to the ever-changing nature of PPP, the SBA continues to issue new and revised rules and guidance for this program, and how the SBA interprets their rules will have a significant impact on the loan forgiveness process.

How to Apply

Apply online today. Please fully complete the Forgiveness Worksheet. Be sure to have your completed Forgiveness Worksheet and supporting documents in electronic form ready to upload.

Please note: If you received your PPP loan through another lender, please check with that lender to apply for loan forgiveness. Applications will be processed only through our online portal; applications are not accepted via branches, phone, fax, email, or mail.

Apply now

More information or questions

For more information including the comprehensive program rules, visit sba.gov/ppp. If you have questions, review our FAQs or contact us.

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