COVID-19 Assistance for Business Solutions Members

We’ve worked diligently with the U.S. Small Business Administration (SBA) to process and fund the Paycheck Protection Program (PPP) loans on behalf of our business members—with many loans successfully funded.

Update on Paycheck Protection Program (PPP) Loans

Because the SBA announced they would no longer accept applications after August 8, 2020, Navy Federal stopped accepting PPP applications as of July 29, 2020. All those whose loans were approved have been notified.

We understand small business owners are facing a lot of uncertainty right now, and we’ll continue to post updates for you here as we receive them.

PPP Loan Forgiveness

Highlights of Forgiveness Requirements

The following is a general overview. Visit the SBA’s PPP website for more detailed information on requirements, conditions and deadlines.

Revised Forgiveness Application for Loans $50,000 or Less

The SBA recently released a new, more simple version of Form 3408S, Paycheck Protection Program Borrower Application Form, for borrowers whose PPP loans are $50,000 or less. We’re retooling our online application to reflect those changes.

When You Can Apply for Forgiveness

If you've received a PPP loan through us, we'll email you to let you know when our digital loan forgiveness portal is ready and 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:

  1. the loan funds are used for eligible expenses, as defined by the SBA, incurred during the covered period
  2. 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)
  3. 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
  • Employer-paid state and local taxes
  • Continuation of group health insurance benefits
  • 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

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:

  1. 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.
  2. 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.
  3. 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’s website for details.
  4. Timeline to Rehire. You have 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.


Applying for Forgiveness

What is the covered period, and how does it affect me?

The covered period is the amount of time you have to spend your PPP loan funds on payroll and other eligible expenses.

  • If you received your loan before June 5, 2020, you have the option to choose either 8 weeks or 24 weeks from when you received your loan to spend the funds.
  • If you received your loan on or after June 5, 2020, your covered period is 24 weeks from when you received your loan.

The covered period can’t extend beyond Dec. 31, 2020.

When can I apply for forgiveness, and where can I find the application?

We’ll begin processing forgiveness applications based on the loan’s funding date. When it's time for you to apply, we'll send you an email with a link to your online application. Make sure you sign in to our portal with your personal account credentials (username and password).

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’s 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.

Application Questions

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?

Yes. Each business owner is required to submit documents with the forgiveness application.

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.

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.