PPP Loan details and forgiveness
The SBA just released additional guidance on Paycheck Protection Program (PPP) Loan forgiveness in the form of Frequently Asked Questions and answers. The PPP resumed accepting applications July 6, 2020, and will continue until August 8, 2020. The SBA will forgive loans if the funds are used for employee retention and eligible expenses.
Follow this link to view the newly released frequently asked questions about PPP loan forgiveness:
PPP Loan Details
Loans used for payroll costs, rent, interest on mortgages, and utilities will be fully forgiven. (At least 60% of the forgiven loan must have been spent on payroll.) Other important details include:
– PPP loans have a 1% interest rate and payments will be deferred for six months.
– Loans issued before June 5 mature in 2 years and loans issued after June 5 mature in 5 years.
– There are no government or lender fees, and no collateral or personal guarantees are required.
Loan Forgiveness
Loan forgiveness is based on employers maintaining or rehiring employees and also keeping salary levels constant. If the number of full-time employees or the amount paid to employees decreases, then the amount of loan forgiviness will be reduced.
To simplify the process for borrowers, the PPP loan forgiveness form and instructions include the following:
- Step-by-step instructions to perform calculations to confirm eligibility for loan forgiveness in compliance with the CARES Act.
- Implementation of statutory exemptions from loan forgiveness reduction if employers rehire employees by June 30.
- New loan forgiveness reduction for borrowers who attempted to rehire employees with a good-faith, written offer but were declined.
- Option to include payroll and eligible non-payroll expenses incurred or paid during the 24-week period after receiving a PPP loan.
- An “alternative payroll covered period” so that borrowers’ may use their regular payroll cycles to calculate payroll costs.
Follow this link to view the newly released frequently asked questions about PPP loan forgiveness:
PPP Loan Forgiveness Application
PPP Loan Forgiveness Application (06-16-2020) (English version)
PPP Loan Forgiveness Application (06-16-2020) (Spanish version)
INSTRUCTIONS for the PPP Loan Forgiveness Application (06-16-2020)
PPP EZ Loan Forgiveness Application & Instructions
PPP EZ Loan Forgiveness Application (06-16-2020)
INSTRUCTIONS for the PPP EZ Loan Forgiveness Application
If you have questions about PPP or any other government funding program, please contact a CGA Business Law Attorney.
If you have questions about how any program will impact your employees, please contact a CGA Labor and Employment Law Attorney.
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