SBA Release PPP Loan Forgiveness Application

After missing their promised April 26th deadline, the Small Business Administration (SBA) has finally released formalized Paycheck Protection Program loan forgiveness eligibility guidance and the corresponding application form.Up until yesterday evening, which was when the SBA rolled out this new documentation, there was much mystery surrounding the actions and steps that must be taken by PPP loan recipients to achieve loan forgiveness.

The detailed and extensive information and documentation released yesterday provides much needed guidance and clarification about how to calculate potential loan forgiveness for PPP borrowers.

The full guidance released by the SBA and the corresponding loan forgiveness application can be found here.

Here are some important points surrounding the information released by the SBA:

  • The application form contains formulas that allow businesses to calculate their potential loan forgiveness amounts, taking into consideration the following key factors and variables:
    • Headcount and salary levels through June 30, 2020 vs. the designated period to use as a benchmark.
    • How reductions in pay and headcount, and even full restoration of either/both, may impact the resulting loan forgiveness credit.
  • A new exemption was released which will adjust the loan forgiveness reduction for any borrower “who has made a good-faith offer to rehire workers that was declined”. In other words, borrowers will not be penalized should an employee refuse an offer to return to work after they were furloughed or laid off.
  • The SBA will allow the loan recipient to define the first eligible payroll period in their application for forgiveness to be the payroll that first covered work performed from the day of loan issuance (vs. the first payroll to be paid after the loan issuance date). This will allow organizations to restore headcounts and salary levels which may not be accurately captured otherwise.
  • Congress is still expected to propose an Amendment to the CARES Act in the coming weeks that will address other concerns tied to the PPP. Anticipated changes may include allowing for more PPP-forgivable money to be spent on non-payroll expenses and even extending the period of time borrowers will have to use the Payroll dollars beyond the designated eight weeks. The SBA also announced that additional guidance in this area can be expected.

We hope you will join us every Tuesday for our weekly webinar, where we will spend our entire hour explaining the form, the calculations, and how to determine your projected loan forgiveness amount.


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