COVID-19 Assistance for Business Members
We’ve worked diligently with our government partners to process and fund Paycheck Protection Program (PPP) loans on behalf of our business members—with many loans successfully funded. We’ll continue to post updates to this page as they become available.
Paycheck Protection Program Update
The Small Business Administration's Paycheck Protection Program (PPP) ended on May 31, 2021. Members who have a PPP loan may be eligible for forgiveness. If you received your loan through Navy Federal, you must apply through our digital portal. You cannot apply directly through the SBA. Details on the application process are in the FAQs below.
PPP Loan Forgiveness
Highlights of Forgiveness Requirements
The following is a general overview. Visit the SBA PPP website for more detailed information on requirements, conditions and deadlines.
When You Can Apply for Forgiveness
If you've received a PPP loan through us, we'll email you to let you know when it's time for you to apply. Please note: You’ll need to sign in using your personal credentials.
When planning your forgiveness application timeline, keep in mind that Navy Federal has up to 60 days to process your request and the SBA has up to 90 days to approve Navy Federal’s recommendation.
Please note that the timing could change if there are any new legislative amendments. If there are updates, we’ll email you and post the information on this page.
Requirements for Forgiveness
The SBA will forgive your loan if:
- the loan funds are used for eligible expenses, as defined by the SBA, incurred during the covered period
- at least 60% of the funds must have been used for eligible payroll-related expenses; up to 40% of the PPP loan may be used for other allowable costs (detailed below)
- all employees on the payroll with salary amounts of up to $100,000 as of Feb. 15, 2020 are maintained or restored at the time you apply for forgiveness
The forgiveness conditions above are subject to any change in guidance by the SBA and the U.S. Department of the Treasury. You must provide documentation for how you spent the funds to prove you've complied with the SBA's forgiveness requirements.
Payroll Costs (at least 60% of the funds)
- Salary, wages, commissions, cash tips
- Employee benefits such as vacation, parental, family, medical or sick leave
- Employer-paid state and local taxes
- Continuation of group health insurance benefits
- Group life and disability insurance
- Vacation, medical, parental, family sick leave
- Retirement benefits
Other Allowable Costs (maximum of 40% of the funds)
- Interest on mortgage obligations incurred before Feb. 15, 2020
- Rent payments on leases dated before Feb. 15, 2020
- Utility costs under service agreements dated before Feb. 15, 2020
- See the SBA website for more detailed guidance on potentially allowable costs such as certain payments for software or cloud computing services, covered property damage related to vandalism or looting during public disturbances, covered supplier costs and worker protection expenses.
Factors That Affect Forgiveness
According to the SBA and the U.S. Department of the Treasury, your forgiveness amount may be affected by the following:
- Non-Payroll-Related Costs. Your loan forgiveness will be reduced or denied if you use the loan amount for anything other than eligible payroll costs, mortgage interest, rent and utilities payments. No more than 40% of the loan can be used for non-payroll-related costs.
- Reduced Staff. Your loan forgiveness may be reduced if you decrease your full-time employee headcount. There are allowable exceptions such as employees turning down an offer to be rehired, an inability to return to Feb. 15, 2020 levels because of COVID-19 restrictions or an inability to find qualified employees.
- Payroll Reduction. Your loan forgiveness may also be reduced if you decrease salaries and wages by more than 25% for any employee who made less than $100,000 annualized in 2019. There are allowable exceptions. Please refer to the SBA website for details.
- Timeline to Rehire. For First Draw PPP loans made on or before August 8, 2020, you had until Dec. 31, 2020 to restore your full-time employment and salary levels for any changes made between Feb. 15, 2020 and April 26, 2020.
Apply for Forgiveness
When can I apply for forgiveness, and where can I find the application?
We're processing forgiveness applications based on the loan’s funding date. We’ll email a link to your online application when it’s time to apply. Make sure to use your personal account credentials (username and password) to sign in.
Can I apply directly through the SBA?
No. If you received your PPP loan through Navy Federal, you must apply for forgiveness through our digital portal. It’s easy to use and provides a streamlined process, and you’ll receive the same forgiveness amount as you would through the SBA.
What if I accidentally delete the forgiveness email Navy Federal sends me?
First, try checking your email’s trash folder to see if you can locate and/or restore the email.
If you’re still not able to locate or restore the email, give us a call at 1-877-418-1462, Monday through Friday, 9 am to 5 pm, ET, and we can walk you through how to access your application.
Where can I find information on what I’ll need to prepare to apply for PPP loan forgiveness?
We'll publish updates on this page. You also can find more information on the SBA website.
Can I submit a paper forgiveness application instead of filling out the electronic form?
No. The forgiveness application will be electronic and available on our digital portal. Once we email you that, you're eligible to start the forgiveness process. You must use the online application in our digital portal.
Can I apply for forgiveness directly through the SBA?
No. If you were issued a PPP loan through Navy Federal, your application for forgiveness must come through our digital portal.
How will I know if my loan has been forgiven completely or the amount that will be forgiven if I only qualify for partial forgiveness?
We’ll keep you informed about the status of your forgiveness application by email.
How long will it take to find out if my loan will be forgiven?
Navy Federal has 60 days to review forgiveness packages and submit our recommendation to the SBA.
In most cases, after we submit your package and our recommendation, the SBA has 90 days to make a decision. In some cases, the SBA may take longer than 90 days to complete its review and render its decision.
Is there any information available about the application and what to expect?
The SBA has published the application’s instructions on their website. Our online application will also include guidelines to help you as you’re filling it out. We encourage you to consult your CPA or financial advisor for additional guidance.
The SBA forgiveness application asks for my SBA loan number, the lender number and the authorization number. Where can I find these?
Once we notify you that you’re eligible to apply, sign in through our digital portal and you’ll see the information has been automatically populated in the correct fields.
If our business has more than one owner, will each owner need to submit documents?
No. One set of required documents for the business is sufficient.
Will there be information on Navy Federal’s website to assist me?
Yes, we’ll continue to update this page with more guidance as it becomes available. And, as noted above, each step of the forgiveness application in our digital portal includes helpful guidance from the SBA.
Can I include paying myself as part of the percentage required to be used for payroll costs? How can I prove I paid myself?
Yes. If you pay yourself from your Navy Federal business account, it’s very simple. Just show that funds were moved from the business account to your personal account for regular payroll. Be sure to record the amount as owner compensation on the forgiveness application.
Repayment Terms and Documents
If the SBA hasn’t yet decided whether my loan has been forgiven, will I still need to make the minimum payments by their due dates? Will I have to make payments while waiting for forgiveness?
No. As long as you submit the loan forgiveness application within 10 months of the completion of the covered period, you won’t have to make a payment until after you’ve completed the PPP forgiveness process and only if there’s a balance.
I’ve read in the news that the SBA will allow borrowers to extend their loans from 2 years to 5 years. Do my loan documents need to be modified?
We’ll work with affected borrowers after a determination has been made regarding loan forgiveness. To extend your loan term from 2 years to 5 years, you’ll first need to apply for loan forgiveness when you become eligible, as outlined above. Once that process has been completed and your loan forgiveness amount has been determined, we'll work with you to modify your loan documents, if appropriate.
If your loan is completely forgiven, you won't owe any payments. Therefore, there won’t be a need to modify your loan terms. If your loan isn’t approved for forgiveness, or if it’s only partially forgiven, then we’ll work with you on a modification of the loan term, if you desire a modification.
If my loan isn’t forgiven either completely or partially, when will I have to start repaying it?
No payments will be due until you’ve completed the PPP loan forgiveness process. After the loan forgiveness process is complete, if you have a balance that must be repaid, we’ll contact you to discuss a repayment plan. This may include new loan documents with new terms, payment amounts and a monthly due date.