SBA Releases PPP Loan Forgiveness Application
The Small Business Administration (SBA) has released the application for Paycheck Protection Program (PPP) loan forgiveness. The 11-page application includes instructions and worksheets to guide businesses through the process. The application and instructions also clarify some requirements and options for businesses requesting forgiveness of their PPP loans, including:
- The FTE (full time equivalent) calculation is based on a 40-hour work week. No person can be considered greater than a 1.0 FTE. For those employees working less than 40 hours per week, the calculation can be based on a 40-hour week rounded to the nearest 0.1 or they can all be considered as .5 FTE’s.
- Businesses can calculate their payroll costs through an “alternative payroll covered period” that aligns with their own payroll schedule. This “alternative” period is only available to borrowers with a bi-weekly (or more frequent pay period like weekly), not semi-monthly or monthly pay periods.
- There’s a new exception from the loan forgiveness reduction for businesses that have made a (1) written offer to rehire workers which was rejected by the employee and (2) any employees who during the covered period (a) were fired for cause, (b) voluntarily resigned, or (c) voluntarily requested and received a reduction of their hours.
- FTE Reduction Safe Harbor if FTE employee levels are restored to February 15th staffing levels by no later than June 30, 2020.
Further guidance is expected soon to help businesses and their lenders navigate the application for loan forgiveness. You can access the SBA PPP loan forgiveness application here. We will be sure to communicate further updates as more guidance becomes available.
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