New PPP Loan Forgiveness Guidelines | What You Need to Know
The U.S. Small Business Administration (SBA), in consultation with the Department of the Treasury, recently released additional Paycheck Protection Program (PPP) Loan Forgiveness guidance in the form of the PPP Loan Forgiveness Application, which includes important definitions and detailed instructions for the new application. This new guidance provides more insight on what the forgiveness process is going to look like.
From the SBA:
The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
#1 Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
#2 Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
#3 Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
#4 Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
#5 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 most notable updates are the new options for borrowers to calculate payroll costs using an “alternative payroll covered period” (if more favorable) and the more specific definition that allows both phone and internet to be considered a “utility” towards the loan.
Download the new PPP Loan Application with new guidelines here and refer to all of the COVID-19 resources available to small business owners here. If you have any questions about the new guidelines please feel free to reach out to us.