PPP Loan Forgiveness Application Now Available! Click to read more.

May 19, 2020
Posted in Newsroom
May 19, 2020 Associated HCM

PPP Loan Forgiveness Application Now Available! Click to read more.

On Friday, May 15, the Small Business Administration (SBA) released the application that borrowers of a Paycheck Protection Program (PPP) loan must use to determine the amount of the loan that may be forgiven.

The CARES Act was passed into law on March 27, 2020. One of the signature pieces of the CARES Act was the PPP, a new SBA loan program.

Up to 100% of a small business’ PPP loan may be forgiven to the extent that it uses the loan proceeds for forgivable purposes and it maintains employee and compensation levels. At least 75% of the PPP loan proceeds must be used for payroll costs.

What were these loans able to be used for?

  • Payroll costs, including benefits;
  • Interest on mortgage obligations, incurred before February 15, 2020;
  • Rent, under lease agreements in force before February 15, 2020; and
  • Utilities, for which service began before February 15, 2020.

What counts as payroll costs? Payroll costs include:

  • Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each
  • employee);
  • Employee benefits including costs for vacation, parental, family, medical, or sick leave;
  • allowance for separation or dismissal; payments required for the provisions of group
  • health care benefits including insurance premiums; and payment of any retirement
  • benefit;
  • State and local taxes assessed on compensation; and
  • For a sole proprietor or independent contractor: wages, commissions, income, or net
  • earnings from self-employment, capped at $100,000 on an annualized basis for each

Borrowers will need to include the following documentation in their loan forgiveness applications:  payment receipts, cancelled checks or account statements documenting the amount of employer contributions to retirement plans that the borrower included in its forgiveness amount.

Be sure to keep backups of your PPP loan forgiveness documentation for 6 years; store documentation in the cloud, external hard-drive or print copies.

When completeing your PPP loan forgiviness application, do NOT lie, the penalties are heavy; up to 5 years in prison or a fine up to $250,000.

The loan application can be found here: https://www.sba.gov/document/sba-form–paycheck-protection-program-loan-forgiveness-application

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