*Also read our most recent update: SBA Releases Guidance Regarding SBA Loan Review Procedures and Responsibilities of Borrowers and Lenders
On May 15, 2020, the Small Business Administration (“SBA”) and Treasury Department released a new Paycheck Protection Program (PPP) Loan Forgiveness Application. The application and detailed instructions and worksheet detail how borrower and lenders will document forgiveness of a PPP loan. The SBA will issue additional regulations and guidance to assist borrowers in completing the application and to provide lenders with guidance on their responsibilities.
Key highlights include:
- Borrowers have an option 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 8-week covered period after receiving a PPP loan.
- Specific instructions on the calculation required to achieve loan forgiveness.
- Implements the statutory exemption from loan forgiveness reduction based on rehiring by June 30th.
- Confirms a new exemption from loan forgiveness reductions for borrowers who have made a good-faith, written offer to rehire workers that was declined.
- Confirms a per employee compensation cap of $15,385 during the 8-week period.
- Requires borrowers and affiliates, if any, to confirm receipt of original loan proceeds in excess of $2.0m.
- Identifies the documentation required to be submitted with the application.
- Includes 7 additional certifications required to be made by borrowers.
Please reach out to us for the latest guidance, and see the PPP Loan Forgiveness Application and Instructions.
A printable version of this information can be found by clicking HERE.
Mark L. Brasee
Neil P. Hassler
This article has been prepared for general information purposes and (1) does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. Always seek professional counsel prior to taking action.