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PPP Loan Forgiveness
Business & Commercial > Business Solutions > PPP/CARES Act > PPP Loan Forgiveness

Applying for Loan Forgiveness

Mechanics Bank will be using an electronic PPP Loan Forgiveness application, similar to the process you went through when you applied for your PPP loan. Please do not send us paper Loan Forgiveness Applications or scanned/emailed Loan Forgiveness Applications. We will send you an email invitation (to the email address associated with your PPP loan) and a link to our portal when it’s time to begin your PPP Forgiveness Application.

Below is a summary of the steps you will go through, with additional information you should review for each step. Please see the tools and guides in the box below for additional information, application instructions and answers to common questions.

Forgiveness Eligibility

As the borrower, it is your responsibility to understand the SBA’s rules and Loan Forgiveness eligibility requirements. Please consult with your preferred financial, tax or legal advisor and/or visit the SBA and U.S. Treasury websites.  Mechanics Bank employees are not in a position to provide information that can be construed as financial, legal or tax advice during this process.

There are important guidelines and requirements specified by the SBA for how you spend PPP funds and your eligibility for loan forgiveness, including:

  • All or some portion of the loan principal and accrued interest can be forgiven if you use the loan funds for purposes that fully meet the forgiveness requirements issued by the SBA.
  • The amount of your loan that is forgiven may be reduced if you do not completely follow the requirements.
  • The actual amount of the forgiveness will depend, in part, on your use of all of the loan funds for forgivable purposes and whether you maintain employee and compensation levels during the required periods.
  • Please consult the SBA and U.S. Treasury websites for any additional eligibility requirements.

Loan Forgiveness Resources

FAQs on Loan Forgiveness

SBA Website

U.S. Treasury Website

Instructions and Forms

Form 3508S Instructions (U.S. Treasury)

Form 3508S (U.S. Treasury)

Form 3508EZ Instructions (U.S. Treasury)

Form 3508EZ (U.S. Treasury)

Form 3508 Instructions (U.S. Treasury)

Form 3508, including Schedule A and Schedule A Worksheet (U.S. Treasury)

Understanding the Forgiveness Amount

The amount of your loan that is eligible to be forgiven will be determined based on the total amount of loan proceeds that you spend during the Covered Period (or Alternative Payroll Covered Period) to retain employees and on certain other non-payroll covered expenses.

Remember, your entire loan CAN be forgiven if you can prove that you used 100% of your loan proceeds for eligible Payroll expenses. If not, you can include other qualifying expenses in your forgiveness request as long as the payroll portion makes up a minimum of 60% (or more) of your total loan amount. Here’s a list of the eligible expenses for each category.

Required Supporting Documentation Preparation

In addition to your loan documents, and depending on which application form you use, you will need documentation of:

  • Payroll Costs – To verify the eligible cash compensation and the non-cash benefit payments from the Covered Period (or the Alternative Payroll Covered Period).
  • Non-Payroll Costs – To verify existence of the obligations/services prior to February 15, 2020, and eligible payments from the Covered Period.
  • FTE - If you are using Form 3508 (Standard Application) you may elect to provide documentation of full-time equivalency (FTE).

Please see our Required Document Checklist for the specific documents required for each expense category, based on application form.

Other Important Documentation Information:

  • Supporting documentation must be available in electronic format so that you can attach it to the online Forgiveness Application.
  • You will only be required to provide documentation verifying those costs for which you are seeking forgiveness (e.g. If you are only seeking forgiveness of Payroll costs, you are not required to provide documentation of Non-Payroll costs, though you may elect to do so if you choose).
  • You will be asked to upload documents at different times during our online application process.
  • Uploaded documents must be no larger than 10 MB and must be in one of the following formats: .doc, .docx, .pptx, .xlsx, .xls, .pdf, .jpg, .jpeg, .png.
  • You can remove and upload documents again if corrections are needed.
  • Please be sure to highlight, circle, underline or otherwise indicate values or data on each uploaded document that is included in your calculations to assist in the review of your application. Not doing so could delay the submission of your application to the SBA.

 We are limited in our ability to answer questions regarding PPP Loan Forgiveness until your application process begins. At that time you’ll have the ability to email your loan processor, but please note you should contact your preferred financial, tax or legal advisor for any questions about your loan forgiveness. You should also review the information on the SBA and US Treasury websites (links provided above and below). You may contact us before you begin the PPP Loan Forgiveness process at CaresAct@mechanicsbank.com, but please note, due to the large volume of emails we receive each day, you may not receive a response for 48 hours. Thank you for your patience and understanding.

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Financial, Tax and Legal Advice - We recommend that you obtain professional advice from your preferred financial, tax or legal advisor before beginning a PPP Loan Application and/or the Loan Forgiveness Application process. The information we are providing on our website is intended to help you navigate either process, and is based on the Bank’s interpretation of laws, rules, regulations, and guidance provided by the SBA and U.S. Department of Treasury regarding the Paycheck Protection Program at the time this page was authored. While the information provided is intended to be accurate it should not be considered, and is NOT INTENDED TO BE FINANCIAL OR LEGAL ADVICE. This page and its content may be updated periodically if there are changes to the Program. As we’ve all seen, the Program is rapidly evolving and the Bank cannot be held responsible for any errors or omissions as a result of this. Please consult the SBA and U.S. Treasury websites for the most up-to-date information. In the event of any discrepancies between the information on our website and the SBA or U.S. Treasury sites, please follow official SBA or U.S. Treasury guidance.

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Deposit and loan products are offered by Mechanics Bank, Member FDIC and Equal Housing Lender. NMLS#442116


Investment management and trust services are offered by Mechanics Bank Wealth Management. Mechanics Bank investment products are:

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