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  • Writer's pictureMyriam Cruz

SBA Direct Forgiveness Direct

The Small Business Administration has improved the loan forgiveness application process for small business who received less than $150,000.00 and created a simpler and faster loan forgiveness application for lenders who opted in to using their portal at

Many business owners are looking for information on how these changes benefits them or affects them. In this blog I will try to answer these two top questions, small business owners have been asking your lending solutions.

I am self-employed, how do I apply for loan forgiveness?

For independent contractors, sole proprietor, and self-employed workers, you can have eight weeks of your loan proceeds automatically forgiven as a salary replacement. Even if you took the full amount of $20,833.

If you applied for the direct loan forgiveness, you may or not be required to upload documentation to back up these payments. It is recommended to keep records of the documentation such as bank statements, copy of checks just in case you are asked to provide backup information later in the process.

I have employees, what information do I need to provide?

Your loan forgiveness application is determined by the number of employees business had at the time of the loan application and how many employees remained employed at the time of the loan forgiveness application.

At least 60% of the PPP Loan proceeds should have been used for payroll cost, the covered period can range between 8-24 weeks.

Borrowers first draw and second draw covered period cannot overlap.

Have your payroll reports available, 941 Forms, payroll reports, bank statements in case you will be required to upload information.

Employers remain subject to a reduction in the PPP Loan forgiveness amount if there was a reduction of the number of employees (full time employees) at the time of the application.

What happens if I didn’t use the PPP funds the way I was supposed to?

If you didn’t spend the PPP funds the way you were supposed to, it can’t lead to having a loan to repaid with 1% Interest rate over two years for the loans taken before June 5, 2020 and for the second round of PPP the maturity date is 5 years.

Keep on mind that you have between 8-24 weeks covered period, so it may be a good idea to determine if funds were not used within 8 weeks, you funds depleted before the 24 weeks.


Email us at or call us for additional guidance.

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