In The Know – PPP Loans
The Small Business Administration (SBA), in consultation with the Department of the Treasury, released the Paycheck Protection Program Loan Forgiveness Application & Instructions; along with answers to FAQ. The Treasury/SBA guidance that came out gave a “safe harbor” for loans under $2 million related to additional scrutiny for employers to certify the need for the loan in the first place; it’s anticipated more regulations and/or relief is forthcoming concerning the “forgiveness” part of how the loan proceeds are actually used by employers that borrowed amounts under this threshold.
Our summary, as well as the official SBA/Treasury documents, can be downloaded below. The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
- Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
- Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
- Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
- Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
- Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that were declined