Partner in Charge
Sean Bryan’s column—entitled "New FAQs for PPP Loan Forgiveness”—addresses supplemental information and detail on PPP loan forgiveness.
On August 4, 2020, the Small Business Administration posted a series of FAQs regarding PPP loan forgiveness, supplementing (but not replacing) the several Interim Final Rules issued in May and June on the topic. These are broken into four sections – general questions, payroll cost questions, nonpayroll cost questions, and forgiveness reduction questions. These FAQs do not provide significant new material, but provide some greater detail on several matters.
General Loan Forgiveness FAQs. This section covers matters such as which loan forgiveness application to use, whether scanned or other electronic versions of documents and signatures are acceptable (the answer is yes unless other applicable federal regulators require original signatures), and whether a borrower must make loan payments before a loan forgiveness determination is made (no as long as the forgiveness application is timely made within 10 months after the end of its Covered Period).
Loan Forgiveness Payroll Costs FAQs. These FAQs generally repeat other guidance regarding how to calculate forgivable costs of payroll cycles and what is and is not included in forgivable payroll costs, including for owners of borrowers.
Loan Forgiveness Nonpayroll Costs FAQs. While these FAQs also repeat prior guidance, they provide some elaboration regarding permissible inclusion of utility payments and interest payments, such as that interest on unsecured credit is not eligible for loan forgiveness but payments on leases renewed during the covered period are eligible costs. These FAQs clarify that while an Alternate Payroll Covered Period may be used for calculating payroll costs, it may not be used for calculating nonpayroll costs.
Loan Forgiveness Reductions FAQs. These FAQs generally repeat prior rules but provide several examples of what does and does not result in a reduction in PPP loan forgiveness.
For additional detail, click on the link below: