September 24, 2020

Volume X, Number 268

September 24, 2020

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September 23, 2020

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September 22, 2020

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SBA Releases PPP Loan Forgiveness Application: Clarification on Forgiveness

Yesterday, 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:

  • 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;

  • Mortgage obligations include payments of interest on real or personal property, but the obligation must have been in place prior to February 15, 2020;

  • Owner-employee or self-employed individual/general partners must not exceed eight weeks’ worth of 2019 compensation during the 8 week period;

  • 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;

  • Full time equivalents (“FTEs”) are considered on a 40 hour per week basis;

  • 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

  • For the headcount reduction calculation rehire safe harbor, FTEs are counted as of June 30, 2020.

See the full application here.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 138

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About this Author

Phil Feigen of the Polsinelli Law Firm Corporate Transaction Attorney, in Washington DC
Office Managing Partner

Phil Feigen brings a unique perspective to providing general corporate advice, as well as complex business counsel to clients in ever-changing regulatory environments.  For more than 20 years, Phil has been providing guidance with respect to Small Business Investment Companies and other Small Business Administrative regulations, federal and state banking laws and federal securities laws. 

Phil focuses on helping clients through the SBIC licensing process so that they may realize the benefits of the program and increase the amount of investment...

202-626-8330
Sara C. Ainsworth Securities & Corporate Finance Attorney Polsinelli Washington, D.C.
Associate

As an associate in the Securities & Corporate Finance practice, clients rely on Sara Ainsworth to work with Polsinelli’s team of attorneys to analyze each transaction matter to develop a strategic approach to representation based on the client’s immediate and long-term business and operational goals.

Working closely with seasoned Polsinelli attorneys in the Securities & Corporate Finance practice, Sara helps deliver a range of legal services during the life cycle of the client’s business—from selecting the appropriate choice of entity through to exit strategy.  Her practice focuses on:

  • Planning and executing capital-raising transactions
  • Drafting and negotiating key commercial agreements
  • Money service business and banking applications and registrations
  • Mergers and acquisitions and other strategic transactions
  • Fund formation, including regulated funds such as Small Business Investment Companies

Sara supports clients in a variety of industries, including the financial technology and mobility industries. Collaborating with attorneys from other related practices allows Sara and the entire attorney team to provide clients with comprehensive legal advice designed to minimize liability, maintain flexibility, and advance the client’s objectives.

202.772.8495