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'll no longer accept applications after the end of June, Navy Federal stopped accepting PPP applications as of June 22, 2020.

The SBA also recently revised their guidelines. Borrowers can now extend the amount of time in which to spend their PPP loan proceeds and to apply for forgiveness. Navy Federal will work with PPP borrowers to modify loan documentation to reflect any updated terms of the program and individual business needs.

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.

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.

The SBA will forgive your loan if:

  1. the loan funds are used for eligible expenses, as defined by the SBA, incurred during the 24-week 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
  • Employee benefits such as vacation, parental, family, medical or sick leave
  • State and local taxes
  • Continuation of group health insurance benefits
  • 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

When You Can Apply for Forgiveness

Borrowers may apply for loan forgiveness as early as 8 weeks after the loan is disbursed and up to 10 months after the 24-week-covered period ends. We'll post updates here as released by the SBA.

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.


When can I apply for forgiveness of my PPP loan?

According to the SBA, you may apply for forgiveness as early as 8 weeks after the loan is disbursed and up to 10 months after the 24-week-covered period ends.

However, even if you’ve reached the earliest date allowed by the SBA (8 weeks), the rules on the forgiveness process haven’t been finalized. We're monitoring the situation and will be ready to accept applications once the SBA releases guidance to lenders on how to submit borrowers' applications for SBA review.

How do I apply for PPP loan forgiveness?

The application to apply for PPP loan forgiveness is electronic. You can apply online through our digital portal once the SBA finalizes the process rules and the application becomes available.

Can I submit a paper application instead of filling out the electronic form?

No. Navy Federal will not accept paper versions of the application. You must apply online through our digital portal.

The SBA forgiveness application asks for my SBA loan number, the lender number and the authorization number. Where can I find these?

When you sign in through our digital portal, this information will be added to your application automatically.

Where can I find more information on what I need to do to apply for PPP loan forgiveness?

We’ll publish updates as we receive them on this page. You also can find more information on the SBA’s website.