New PPP Loan Forgiveness FAQs Released
The Small Business Administration (SBA), in consultation with the Department of the Treasury, released long-awaited FAQs providing guidance to address borrower and lender questions concerning forgiveness of Paycheck Protection Program (PPP) loans. Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as amended by the Paycheck Protection Program Flexibility Act, together with subsequent Interim Final Rules published by the SBA, set forth the expenses for which businesses were permitted to use their PPP loan proceeds along with other requirements in order to be eligible for loan forgiveness. The 23 FAQs covered in this release provide additional info around the forgiveness calculations process and are divided into 4 topic areas:
- General Loan Forgiveness– Provides some detail around the forgiveness application and process.
- Payroll Costs – Provides answers and uses examples for determining and calculating payroll costs and time periods includable in the payroll costs eligible for forgiveness.
- Non-payroll Costs – Provides answers and uses examples in determining and calculating other forgiveness-eligible operating costs for PPP loan proceeds not required to be used for payroll expenses.
- Loan Forgiveness Reductions – Provides illustrations of how the amount of PPP loan proceeds eligible for forgiveness may be reduced when employee headcount, salaries or hourly wages decline during the applicable calculation period.
View all of the SBA’s PPP Loan Forgiveness FAQs here: https://home.treasury.gov/system/files/136/PPP–Loan-Forgiveness-FAQs.pdf