SBA Publishes PPP Loan Forgiveness Application

in Home, In The News, Employment Law, Agriculture

On May 18, 2020, the SBA released the Paycheck Protection Program (PPP) Loan Forgiveness Application. The application itself includes additional guidance on rules, how forgiveness is determined, and how to calculate and apply for loan forgiveness under the PPP. The application can be accessed here.

The application has many clarifications. One of important note, is the option for an alternative payroll period versus the 8-week period immediately following the date the funds were disbursed.  The guidance also clarifies that payroll costs may include payments to employees that are paid after the end of the 8-week period, as long as they were incurred during the 8-week period and paid to the employee on or before the next regular payroll date.

The application also includes a safe harbor calculation to allow employers to exclude required reductions in forgiveness amounts based on specific circumstances. A borrower is exempt from this reduction in loan forgiveness if both of the following conditions are met: (1) the borrower reduced its FTE employee levels in the period beginning February 15, 2020 and ending April 26, 2020; and (2) the borrower then restored its FTE employee levels by not later than June 30, 2020 to its FTE employee levels in the borrower’s pay period that included February 15, 2020. The safe harbor assists borrowers who are having difficulty rehiring laid-off employees to get their FTE count back to pre-COVID levels. IN order to qualify for this exception, the employer/borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower. Employees and employers should be aware that employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.

We recommend you have someone review your loan forgiveness application to ensure you are claiming only qualified expenses.  Once the application is submitted, we do not know if there will be any opportunity to appeal the SBA’s determination of your forgiveness amount.  Thus, it is critical to get it right at the time of your submission.  If you have any questions or concerns about your PPP loan or application, please do not hesitate to contact McKague Rosasco LLP.

Disclaimer:  The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general information purpose only.  Information on this website may not constitute the most up-to-date legal or other information.  You should always consult an experienced attorney if you have any questions about your business, policies, or your particular circumstances. 




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