On May 15, 2020, the Small Business Administration released the Loan Forgiveness Application for Payroll Protection Program funding. The form and instructions include several changes to the forgiveness calculations that are intended to reduce compliance burdens, simplify the process, and increase qualifying costs for borrowers. These changes include:
- 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 SBA is expected to issue additional guidance soon to further assist borrowers who are completing the application. There will also be additional guidance for lenders on their responsibilities.
This new guidance will help borrowers seeking forgiveness at the end of the eight-week covered period, which begins upon disbursement of the funds. We are available to assist in navigating this new guidance as it relates to loan forgiveness, as well as any forthcoming new guidance. Click here to view the application and instructions.