Today, the U.S. Small Business Administration, in consultation with the U.S. Department of the Treasury, released the Paycheque Protection Program (PPP) Loan forgiveness application and detailed application instructions.
The form and instructions inform borrowers on how to request the cancellation of their PPP loans, in accordance with the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The SBA will also soon be issuing regulations and guidelines to further help borrowers complete their applications and to provide lenders with guidance on their responsibilities.
The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
• Options that allow borrowers to calculate salary costs using an “alternative payroll coverage period” that aligns with borrowers’ regular pay cycles
• Flexibility to include eligible salary and non-salary expenses paid or incurred within the eight week period of receipt of their PPP loan.
• Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
• Borrower friendly implementation of statutory exemptions of reduced loan forgiveness based on rehiring by June 30
• Addition of a new exemption from the reduction of loan forgiveness for borrowers who made a good faith written offer to rehire workers which was refused.
The PPP was created by the CARES Act to provide forgivable loans to qualifying small businesses to keep U.S. workers on the payroll during the COVID-19 pandemic. The documents released today will help small businesses apply for forgiveness at the end of the eight-week period, which begins with the disbursement of their loans.
Click here to see the app and instructions.