On May 15, 2020, the SBA released its PPP Loan Forgiveness Application. A copy of the application can be found on the SBA’s website and may also be available through your PPP lender.
Key points from the application
- Clarifies a $15,385 per individual maximum payment from PPP loan proceeds
- Clarifies that both real and personal property lease payments are eligible non-payroll expenses; i.e. automobile lease payments and equipment lease obligations should qualify for the 25% maximum non-payroll portion
- Specifically includes “transportation, telephone, or internet access” as additional eligible utility expenses
- Creates an elective “Alternative Payroll Covered Period”: Borrowers with a biweekly or more frequent payroll may choose to delay the start of their 56 day covered period to coincide with payroll cycles
- Clarifies that Eligible Payroll Costs include both “costs paid” and “costs incurred” during the 56 day covered period; a Borrower may use PPP funds for payroll “costs incurred” (W-2 salary or wages earned in the covered period) after the end of the covered period “if paid on or before the next regular payroll date”; this suggests that Borrowers who elect not to use an Alternative Payroll Covered Period will need to pro-rate their final payroll to coincide the covered period
- Outlines supporting documentation that must accompany the application
- Borrower must affirmatively designate if its PPP loan exceeds $2 million
- Confirms the June 30, 2020 “FTE Reduction Safe Harbor” deadline by which a Borrower may restore its FTE employee levels to Borrower’s pre-pandemic levels, as measured against “Borrower’s pay period that included February 15, 2020”
PPP loan funds remain available and lenders continue to accept new applications. Our team is available to assist you in navigating through the complexities of the PPP loan forgiveness application and advise with respect to other public and private lending opportunities related to COVID-19’s impact on your business.