Treasury, SBA Release Loan Forgiveness Application
The US Treasury and the Small Business Administration (SBA) have coordinated to release the Paycheck Protection Program (PPP) Loan Forgiveness Application. The PPP was enacted under the CARES Act to provide eligible small businesses with loans during the COVID-19 pandemic. The application and corresponding instructions advise borrowers on how to apply for forgiveness of PPP loans under the CARES Act.
The SBA is expected to issue regulations and guidance to assist borrowers as they complete their applications, according to the Treasury. Spiegel has been providing guidance to its clients as they work to navigate their way through the application process. It is important to provide the correct information, regarding the business loan, to ensure loan forgiveness.
Measures intended to reduce compliance burdens and simplify the process for borrowers include:
- options to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles;
- flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving 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 from loan forgiveness reduction based on rehiring by June 30; and
- the addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined.
Reach out to Spiegel directly if you would like assistance with the application (below).
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.