COVID-19 UPDATE: PPP LOAN FORGIVENESS APPLICATION RELEASED
The Small Business Administration (SBA), in consultation with the Department of the Treasury, recently released the Paycheck Protection Program (PPP) Loan Forgiveness Application and detailed instructions for the application. The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The SBA advised it will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and provide lenders with guidance on their responsibilities. The form and instructions clarify several questions necessary for small business borrowers to comply with the Act and administer loan proceeds to maximize forgiveness, 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 was declined.
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