On Friday, May 15, 2020, the Small Business Administration (SBA), in consultation with the U.S. Department of Treasury, released the Paycheck Protection Program (PPP) Loan Forgiveness Application. The link to the form/instructions is provided below.
Background: The PPP was created by the CARES Act to provide forgivable loans to eligible small businesses to “keep American workers on the payroll during the COVID-19 pandemic.” The loan forgiveness application and accompanying instructions will help small businesses seek forgiveness.
Timing: Loan forgiveness occurs at the conclusion of the eight-week covered period, which begins with the disbursement of the PPP loan.
Forgiveness Form/Instructions: According to the SBA, the form/instructions “inform borrowers how to apply for forgiveness of the PPP loans.” We understand that the SBA will also be issuing supplemental regulations and guidance to help borrowers complete the application and to guide lenders on how to review the applications.
The SBA intends for the form to reduce compliance burdens and simplify the process for borrowers. To that end, the form allows for things such as:
- Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles;
- Allowing borrowers to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan; and
- A new exemption for borrowers who have made a good-faith, written offer to rehire workers that was declined.
The form includes instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.
Click here to view the application and instructions.
If you have questions regarding the Paycheck Protection Program Loan Forgiveness Application, please contact either Frank Chmelik, Seth Woolson, or Les Reardanz at Chmelik Sitkin & Davis P.S. at 360.671.1796.