Accountants + Business Advisors

BREAKING: SBA and Treasury Release Paycheck Protection Program Loan Forgiveness Application

5.15.20

BREAKING: SBA and Treasury Release Paycheck Protection Program Loan Forgiveness Application

Friday, May 15, 2020

By COVID-19 Response Team

The following was released earlier this evening. We are still analyzing, but here are critical components of the summary of costs eligible for forgiveness:

Incurred and paid     
Payroll

  • Paid = considered paid on date payroll checks are distributed
  • Incurred = Day the employee’s pay is earned
    • Payroll costs incurred but not paid during the borrower’s last pay period of the Covered Period (56 days) are eligible for forgiveness if paid on or before the next regular payroll date.

Eligible non-payroll costs (Agreements must be in force before February 15, 2020)

  • Must be paid during Covered Period or incurred during Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period.
  • Covered mortgage obligation interest includes any business mortgage obligation on real or personal property
  • Covered rent includes business rent or lease payments for real or personal property
  • Covered utilities includes electricity, gas, water, transportation, telephone or internet access

Individual employee payroll costs eligible for forgiveness cannot exceed annual salary of $100,000. 

SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities. See the latest release below from the U.S. Treasury Department. 
 


U.S. Treasury Department
Office of Public Affairs

 
Press Release:  May 15, 2020                                                  
Contact: Treasury Public Affairs, (202) 622-2960
 
SBA and Treasury Release Paycheck Protection Program Loan Forgiveness Application
 
WASHINGTON—Today, the Small Business Administration (SBA), in consultation with the Department of the Treasury, 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).  SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.
 
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 was declined

The PPP was created by the CARES Act to provide forgivable loans to eligible small businesses to keep American workers on the payroll during the COVID-19 pandemic.  The documents released today will help small businesses seek forgiveness at the conclusion of the eight week covered period, which begins with the disbursement of their loans.

Click here to view the application and instructions.

Apple Growth Partners’ published material provides general coverage of its subject area and is presented to the reader for educational purposes based on the most current regulatory information available at the time it was written. All communications, whether written or oral should be reaffirmed prior to the submission of any application. All information in this published material and on our website is provided in good faith; however, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, compliance with any law (federal, state or local) or professional standard or completeness of any information. We assume no responsibility to any recipient of this material to correct or update its contents for any reason, including changes in any law or professional standard. It is not intended to be audit, tax, accounting, advisory, consulting or investment advice. The information in this article is also not a substitute for legal advice and may not be suitable in a particular situation. Consult your attorney for legal advice.

Our articles, other published materials and website occasionally contain links to other web pages. Links to organizations and government agencies are provided as a convenience to our readers. The firm does not endorse and is not responsible for any third-party content that may be accessed from its website and does not recommend or endorse the use of any third-party’s services. The links are to be accessed at the user’s own risk, and the authors of this website make no representations or warranties about the content of these links.