3 Important Record Types You Need to Secure PPP Loan Forgiveness

The Payroll Protection Program (PPP) brought great relief to many American workers and small business owners when it was passed last month. Millions of people have been benefiting from the program and will continue to over the coming months. 

But did you know that by not following the PPP rules you could be in danger of not having your loan forgiven? Tied to the granting of low-interest rate loans to the masses of business owners and the promise of forgiveness of those loans after a specified time period came with some strong strings attached. If you don’t follow the rules laid out by the Department of the Treasury, then your business will be required to pay back the loan within two years from when the loan began.

But you shouldn’t need to worry about that if you’ve done your due diligence by not only following the rules but also keeping records of your following the rules.


The records you need to keep in relation to the PPP fall into 3 broad categories: Employee records, property records, and miscellaneous records.


The bulk of the necessary documentation that you’ll need to keep is that which verifies the number of employees on payroll and their pay rates—including IRS payroll tax filings and state income, payroll, and unemployment insurance filings.

Our recommendation to have ready:

  • Payroll Journal for pay period covering 2/15/20,
  • Payroll Journal for pay periods during 8-week period immediately following receipt of PPP proceeds,
  • Details of employees on payroll, including annual salary, a breakdown of full-time vs part-time employees (and if part-time, the average weekly hours worked),
  • Documents to verify payments to group health insurance and/or retirement plans during the 8-week period
  • Payroll tax returns for all of 2020 up to the date of applying for forgiveness


Another subset of documents that you’ll be needing to keep are those verifying payments on covered mortgage obligations, lease obligations, and utilities.

Our recommendation to have ready:   

  • Copies of rental agreements (must be in place prior to 2/15),
  • Copy of any mortgage statement or bill dated prior to 2/15 and copy of mortgage statement/bill showing principal and interest detail, during the 8 weeks immediately following receipt of PPP proceeds,
  • Copies of utility bills paid during the 8 weeks immediately following receipt of PPP proceeds,

Note, any rental agreements, mortgage statements, and utility bills should be in the same name of the company for which the PPP Loan was approved.

You should also keep bank statements and cancelled checks for all the above as well.


If you are a sole proprietor, you have 8 weeks of the loan forgiven as a replacement for lost profit. This amount will be limited to 8 weeks of your 2019 net profit. For the remaining amount to be forgiven, you will need to provide documentation as listed above for rental/mortgage interest and utilities.

You should also have certification from an authorized business representative that the documentation provided about the small business is true and that the amount being forgiven was used in accordance with the program’s established guidelines.


Remember, that 75% of the PPP proceeds must be used for payroll costs.  Good record keeping and bookkeeping will be critical for having your loan forgiven. You need to keep track of eligible expenses and their accompanying documentation over the eight week period. Your lender will likely require these documents in digital format, so take the time to scan any paper documents and keep backups of your digital records. Finally, take note that forgiveness must be applied for within 90 days of the end of the eight week loan term.  Applications for forgiveness after that will not be accepted.

We know you likely are nervous about being sure you take the right measures so that you don’t end up with a large loan to pay back—especially when contrasted to how you would feel knowing that your debt could have been forgiven. But there is no reason to fret—we can help cross your t’s and dot your i’s.

Do you have questions about PPP forgiveness? We are here to guide you with a steady hand. Give us a call at (888) 272-7102 or send us a message. We look forward to talking with you.

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