SQUARE CAPITAL GUIDE
Applying for PPP loan forgiveness
If you received your PPP loan through Square Capital, this guide will outline how loan forgiveness works, including the steps you’ll need to take and the documents you’ll need to apply.
Since the SBA and Congress can still change forgiveness guidelines, follow our Support Center article for the latest news.
We’ll send you an email and a Dashboard notification with your forgiveness application. Applications will be rolled out in waves, so until you receive yours, there’s nothing you need to send us. Here’s what you can do:
Once your application arrives
If you’re ready, you can apply as soon as you receive your application link from us.
Or wait for more expenses
You may want to wait until you’ve accumulated more eligible expenses during your covered period in order to maximize your forgiveness amount.
Your covered period for forgiveness-eligible expenses lasts 24 weeks after you received your loan, or until December 31, 2020—whichever comes first. If you received your PPP loan before June 5, you can choose an 8-week covered period. Either way, you’ll have up to 10 months after your covered period ends to apply for loan forgiveness.
Eligible expenses include payroll, utilities, rent, and mortgage interest. Your covered period for expenses is 24 weeks after you received your loan, or until December 31, 2020—whichever comes first. For loans before June 5, there's also an 8-week option.
Payroll
60% (or more) of your loan needs to be spent on payroll. Also, your employee headcount and wages must be back up to pre-COVID rates to qualify for full loan forgiveness.
Business costs
40% (or less) of your loan can be used on eligible business expenses like utilities, rent, and mortgage interest.
Reductions
If you reduced your number of employees or their wages by more than 25% during the covered period and aren’t back to previous levels by the time you apply, expect partial loan forgiveness unless your loan size is $50,000 or less.
We’re working to make the process easy for anyone who received a PPP loan through Square Capital. You’ll upload your documents, and we’ll help you calculate how much of your loan could be eligible for forgiveness.
Make sure to have any documents and receipts showing how you spent your PPP funds on hand and ready to upload. If you use Square Payroll, we’ll already have some documents and information pre-filled in your application.
Employers
If you applied for your PPP loan with a Form 940, 941, 944, or W-2—use these documents:
-
Payroll/Wages: Taxable wage filings such as a Quarterly Form 941
-
Employee compensation: Third-party payroll provider reports
-
Benefits: Third-party payroll provider reports or benefit provider account statements
-
Utilities: Utility account statements verifying payments for February 2020 and each month during your covered period
-
Rent: Monthly landlord (lessor) account statements for February 2020 and each month during your covered period
-
Mortgage interest: Lender account statements for February 2020 and each month during your covered period
Non-employers
If you applied for your PPP loan with a Form 1040 Schedule C, use the following documents:
-
Payroll/Wages: 2019 Form 1040 Schedule C
-
Utilities: Utility account statements verifying payments for February 2020 and each month during your covered period
-
Rent: Monthly landlord (lessor) account statements for February 2020 and each month during your covered period
-
Mortgage interest: Lender account statements for February 2020 and each month during your covered period
If you received an EIDL Advance, the amount of that advance will be deducted from your total forgiveness amount.
What’s the timeline for forgiveness?
After you apply, getting your final decision from the SBA will likely take some time, as thousands of businesses will be applying at once. Here’s a breakdown of the forgiveness schedule:
24 weeks to use the funds. Or by December 31, 2020.
10-month window for you to submit your application.
60 days for Square to verify your application.
90 days for SBA to review and make a final decision.
Timeline and repayment details can vary depending on when your loan was disbursed.
For the most recent updates and SBA guidelines, check our support article.
Square, the Square logo, Square Capital, and others are trademarks of Square, Inc. and/or Square Capital, LLC. Square Capital, LLC is a wholly owned subsidiary of Square, Inc., d/b/a Square Capital of California, LLC in FL, GA, MT, and NY. All loans are issued by Celtic Bank, a Utah-Chartered Industrial Bank. Member FDIC, located in Salt Lake City, UT. The individual authorized to act on behalf of the business must be a U.S. citizen or permanent resident and at least 18 years old. Eligibility for loan forgiveness under the Payment Protection Program (PPP) is not guaranteed and is subject to PPP rules and guidelines. Square Capital, LLC is a licensed servicer and debt collector with the following License Information.