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On Friday, the SBA released the application with instructions form for loan forgiveness under the Paycheck Protection Program (PPP). See here.
The form provides guidance and clarification as to how to apply for PPP loan forgiveness. This includes the following:
- The option for borrowers to use an “Alternative Payroll Covered Period” instead of the “Covered Period” if their payroll reschedule is biweekly or more frequent.
- Added flexibility to allow eligible expenses to be paid after the eight weeks “covered period.” This includes payroll costs that are incurred during the covered period and paid after the payroll period but prior to the next payroll period and nonpayroll costs that are paid during covered period or incurred during payroll period but paid after the covered period but prior to the next billing date.
- Detailed instructions to calculate the loan forgiveness amount.
- Clarification of exemption based on rehires to allow for inclusion of employees who declined good faith attempt to rehire.
The PPP is part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which was enacted on March 27, 2020 in the wake of the Coronavirus pandemic. The PPP was a welcome relief to employers with 500 or less employees economically impacted by the pandemic. With the rush to enact such relief, guidance was needed to flesh out the PPP loan application and forgiveness process. This form provides additional guidance on the heels of the SBA’s May 13, 2020 issuance of frequently asked questions for lenders and borrowers. See here.
