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SBA Paycheck Protection Program (PPP) Forgiveness

PPP Forgiveness

CEF's PPP Forgiveness Process is outlined below (update as of Jan 21, 2021). 

The legislation signed in December 2020 contains changes to the PPP loan forgiveness process, which allows customers with loans of $150,000 or less to use a simplified application for loan forgiveness. The new legislation also allows more expense types to qualify for loan forgiveness.

The SBA has not yet issued complete guidance and forms to support changes to the forgiveness process, so as of now and through January 21, 2021, we have closed our forgiveness applications until further notice. We will update our FAQ’s about changes to the forgiveness process once we have received operational guidelines from the SBA, and will invite additional customers to apply for loan forgiveness as soon as possible.

Please note that forgiveness applications submitted to us are only for CEF PPP loan recipients. Ie, if your PPP loan was processed by another institution, we cannot accept your forgiveness application. If you received a PPP loan through a different lending institution, please refer to them to understand their forgiveness processes and submit an application.

PPP Loan Forgiveness FAQs

Colorado Enterprise Fund (CEF) will begin accepting applications on December 1st, 2020 for loans $50,000 and under. We will be sending e-mails with application links to business owners in the first two weeks of December, starting with business owners who were approved for PPP loans that were less than $50,000. 

For loans over $50,000, we will start accepting applications on December 15, 2020. Please see above for more details on how to submit your application.

SBA rules allow CEF 60 days to evaluate your application and make a decision. You will hear from us when we have made the decision or have questions. 

Within 10 months after the last day of the borrower’s loan forgiveness Covered Period. In no event may the Covered Period extend beyond December 31, 2020. Please see the “for what time period must I show documentation” question below for the definition of Covered Period. See question 4 of the Treasury Department FAQs for more details.   

You must show documentation for the “Covered Period”. The Covered Period is either (1) the 24-week (168-day) period beginning on the PPP Loan Disbursement Date, or (2) if the Borrower received its PPP loan before June 5, 2020, the Borrower may elect to use an eight-week (56-day) Covered Period. For example, if the Borrower is using a 24-week Covered Period and received its PPP loan proceeds on Monday, April 20, the first day of the Covered Period is April 20 and the last day of the Covered Period is Sunday, October 4. In no event may the Covered Period extend beyond December 31, 2020. 

It depends. There are three different forms, each of which has different requirements for backup documents: 

  1. SBA Form 3508S has the fewest calculations. You can use the backup documents listed on the instructions of the 3508S if your PPP loan amount was $50,000 or less and you are exempt from the $2 Million PPP loan total from affiliates rule listed at the top of the 3508S instructions form here.  
    Borrowers that use SBA Form 3508S (or lender equivalent) are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages. SBA Form 3508S also does not require borrowers to show the calculations used to determine their loan forgiveness amount. However, SBA may request information and documents to review those calculations as part of its loan review process.  

  1. SBA Form 3508EZ has some additional requirements. You may use the 3508 EZ if you didn’t have employees, or if you maintained the same number of Full Time Equivalents (FTEs) at 75% or more during the covered period,  full details on qualifying requirements are here 

 If you qualify for the 3508 EZ , the following documentation must be submitted to the lender: 

Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following: a. Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees. b. Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period: i. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and ii. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state. c. Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the Borrower included in the forgiveness amount. d. If you checked only the second box on the checklist on page 1 of these instructions, the average number of full-time equivalent employees on payroll employed by the Borrower on January 1, 2020 and at the end of the Covered Period.  

Nonpayroll: Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period. a. Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from 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 verifying interest amounts and eligible payments. b. Business rent or lease payments: Copy of current lease agreement and receipts or cancelled 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. c. Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments 

If you do not qualify for the 3508S or the 3508 EZ, the form 3508 instructions provide the additional documentation required. 

Yes. Per current SBA guidance, any Economic Injury Disaster Loan (EIDL) advance amount you received will be deducted from your forgiveness amount by the SBA during the settlement process. Please note that an EIDL advance is different than an EIDL Loan.  See question 1 of EIDL FAQs on P. 11 of PPP Forgiveness FAQs for more details.  

No. PPP loan payouts have been determined by the IRS not to be taxable income and expenses covered by the PPP loan distribution are not tax-deductible. See IRS Publication 2020-32
  1. Approved in Full: Lender approved in full the forgiveness amount requested by borrower and the forgiveness amount requested by Lender equals that amount. 

  1. Approved in Part: Lender did not approve the full forgiveness amount requested by borrower and the forgiveness amount requested by Lender is less than the forgiveness amount requested by borrower. 

  2. Denied: Lender denied the entire forgiveness amount requested by the borrower. 

Note that CEF will not make an Approved in Part of Denied decision without communicating with you to ensure relevant facts are taken into account prior to our decision. 

Yes, Congress continues to consider changes to the program as part of broader COVID-19 relief programs. When we receive new guidance or legislation is enacted, we will make any necessary updates to our loan application, loan agreement, and forgiveness application process. 

PPP Overview

The Paycheck Protection Program (PPP), authorized under the Coronavirus Aid, Relief, and Economic Securities (CARES) Act, provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities. Need more information about the CARES Act and the PPP? View our CARES Act & PPP Summary via the link below.


CARES Act and PPP Summary


Fully Forgiven

Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll).

  • Loan payments will be deferred for six months
  • No collateral or personal guarantees are required
  • Neither the government nor lenders will charge small businesses any fees.

Must Keep Employees on the Payroll—or Rehire Quickly

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. If full-time headcount declines, or if salaries and wages decrease, forgiveness will be reduced.

All Small Businesses Eligible

Small businesses (including nonprofits) with 500 or fewer employees are eligible. Businesses with more than 500 employees are eligible in certain industries.

Thanks to Our Lending Partners Who Helped Make This Possible


"Once again, CEF has come to the rescue. Because of their swift action and personally helping us navigate the complex government requirements [for the PPP], we now have the funds to re-open in 30 days with all nine employees still on board."

Diana Gadison | Executive Director | Early Success Academy