Note: Effective May 4, 2021 the Small Business Administrative (SBA) PPP funding is exhausted and applications are no longer being accepted.

Paycheck Protection Program (PPP) Round Two

Under the Economic Aid Act, the Paycheck Protection Program1 allowed eligible businesses to apply for their first PPP loan or for a second draw for their existing PPP loan. Effective May 4, 2021 the Small Business Administrative (SBA) PPP funding is exhausted and applications are no longer being accepted.

PPP Forgiveness

UFCU is not yet accepting PPP forgiveness applications for round 2. We anticipate beginning to accept applications through the online portal as early as July 2021. We will notify you when the online forgiveness application portal is available with instructions for how to access the portal and begin the process.

PPP loans are eligible to be forgiven, in whole or in part, by submitting a loan forgiveness application with UFCU. Eligibility is based on SBA requirements and use of funds for eligible business expenses, of which at least 60% must be used for payroll. PPP loan payments are deferred for ten months following your covered period.

What business expenses are eligible for forgiveness?

  • At least 60% of the PPP forgiveness amount must be used for payroll. The remaining funds can be used for eligible non-payroll costs. Forgivable expenses include but are not limited to:

    • Payroll costs (may include wages, salaries, retirement contributions, healthcare benefits, insurance premiums, covered leave, and other expenses.)
    • Mortgage interest
    • Rent payments
    • Utility payments

    Additional eligible expenses were added with December 2020 legislation and are retroactive to any previous unforgiven PPP loans, including:

    • Covered operations expenditures. Payment for any software or cloud computing service that facilitates business operations, product or service delivery, human resources, or accounting, among other things.
    • Covered property damage costs. Costs related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance.
    • Covered supplier costs. Expenditures to a supplier of goods for the supply of goods that are essential to operations when the expenditure is made and is made pursuant to a contract, order, or purchase order in effect prior to taking out the loan. With respect to perishable goods, the contract, order, or purchase order must be in effect at any time during the covered period.
    • Covered worker protection expenditures. Operating or capital expenditures to facilitate the adaptation of business activities to comply with requirements or guidance issued by federal, state, or local authorities in relation to COVID-19, including personal protective equipment.

    Refer to the SBA for a full list of eligible costs that can be forgiven under a PPP loan.

    If part of the loan is not forgiven, you will be responsible to repay the amount not forgiven plus any accrued interest, according to the terms of the promissory note.

What is the covered period?

  • The covered period is the period in which loan funds must be used to qualify for loan forgiveness. You can choose a covered period of 8 to 24 weeks, beginning on the date you received the loan proceeds.

    Funds must be used for eligible costs incurred during the covered period.

What is the deferral period?

  • No PPP loan payments are due during the deferral period. The deferral lasts 10 months after the last day of the covered period.

    Your deferral period ends either one of two ways:

    1. On the date when the SBA makes a decision on your application for forgiveness, OR,
    2. If you have not applied for forgiveness, 10 months after the end of the covered period.

When can I apply for loan forgiveness?

  • The earliest a borrower can apply for forgiveness is once all loan proceeds for which the borrower is requesting forgiveness have been used. If borrowers do not apply for forgiveness within the deferral period, PPP loan payments are no longer deferred, and borrowers must begin making loan payments to UFCU.

    Please do not attempt to submit a PPP loan forgiveness application downloaded from the SBA site. Loan forgiveness applications must be submitted using the online portal when available.

    UFCU is not yet accepting PPP forgiveness applications for round 2. We anticipate beginning to accept applications through the online portal as early as July 2021. We will notify you once the online forgiveness application portal is available with instructions for how to access the portal and begin the process.

What if I have questions about the application rules, how to document my expenses, or what covered period to use?

  • Our goals at UFCU are to keep you informed, simplify the process of submitting your forgiveness application, ensure that you have the necessary documentation, and update you as your application is processed. While we will be available to assist with questions about the process, questions specific to completing the application should be directed to your accountant, attorney, or other business advisors.

Additional Resources

This year has been difficult for many small businesses and individuals. We are eager to continue supporting our Business Members and community. Thank you for your membership.


1The US Small Business Administration, in consultation with the US Treasury Department, opened the PPP loan portal on Monday, January 11, 2021. It initially accepted First-Draw PPP loan applications from participating Community Financial Institutions. The opening of the SBA loan system is designed to efficiently and effectively implement the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act and to ensure increased access to the PPP for minority-, underserved-, veteran- and women-owned small business concerns. SBA also called upon its lending partners to redouble their efforts to assist eligible borrowers in underserved and disadvantaged communities.