The Small Business Administration (SBA) released new guidance on how Paycheck Protection Program (PPP) borrowers should apply for loan forgiveness. The guidance came in the form of a Frequently Asked Questions (FAQ) document with 23 questions addressing various issues facing PPP borrowers.
The 10-page FAQ document is available here. It has four sections, including:
- General Loan Forgiveness
- Loan Forgiveness payroll costs (including the amount of owner compensation that is eligible for loan forgiveness);
- Loan Forgiveness nonpayroll costs (including costs incurred or paid outside of the 8-week or 24-week covered periods); and
- Loan Forgiveness reductions (including how borrowers should calculate the reduction in their loan forgiveness amount arising from reductions in employee salary or hourly wages).
As of July 21, the PPP had funded nearly 5.1 million forgivable loans totaling more than $521 billion. The deadline for submitting PPP loan applications to the SBA is Saturday August 8. The program has more than $100 billion still available for lending.
- The PPP could be modified or extended under the pandemic relief bill being negotiated. The Senate Republican proposal would provide an additional $190 billion to PPP to fund second-draw loans. It would also streamline the loan forgiveness process for loans under $150k, and expand the eligible expenses that qualify for forgiveness to include covered operations expenditures, property damage costs, covered supplier costs and covered worker protection expenditures.
- The House Democrat Proposal doesn't include new PPP money, but would expand the program's terms for loan forgiveness but not simplify the application, and it would give borrowers flexibility to extend the eight-week covered period to a 24-week period, among several other changes.
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