iYesterday, the SBA released the PPP loan forgiveness application (the “Application”). The Application should be completed by borrowers and submitted to their lenders. The Application sets forth all of the documentation required to verify expenses for purposes of the forgiveness calculation. The Application also clarifies a few points regarding forgiveness, including:
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For administrative convenience, borrowers with biweekly payroll may elect to calculate eligible payroll costs using the 8 week period that begins on the first day of their first pay period following disbursement of the loan;
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Mortgage obligations include payments of interest on real or personal property, but the obligation must have been in place prior to February 15, 2020;
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Owner-employee or self-employed individual/general partners must not exceed eight weeks’ worth of 2019 compensation during the 8 week period;
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Non-cash compensation payroll costs are limited to employer contributions for employee health insurance and employee retirement plans, and employer state and local taxes assessed on employee compensation;
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Full time equivalents (“FTEs”) are considered on a 40 hour per week basis;
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For the salary reduction calculation, borrowers must compare the average annual salary or hourly wage from January 1, 2020 to March 31, 2020 to the average annual salary or hourly wage during the 8 week period, and a specific calculation is provided for hourly workers; and
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For the headcount reduction calculation rehire safe harbor, FTEs are counted as of June 30, 2020.
See the full application here.
