ADVOS | Strategy + Law 

COVID-19 Updates

PPP Loan Forgiveness Application and Guidance

By Whitney Harper on 05.18.2020
Man offering document and pen to other person

SBA has released the application for PPP Loan forgiveness, which includes detailed guidance regarding forgiveness calculations.  The application is available here.

Key Updates: 

  • Option for alternative payroll period.  The forgiveness calculations allow the borrower some flexibility in selecting the 8 week period during which payroll will be counted
  • Both paid AND incurred costs are forgivable.  Forgiveness is available for forgivable costs that are paid during the Covered Period, as well as forgivable costs incurred during the Covered Period but not paid until the next after the Covered Period.
  • Payroll costs are defined to include cash compensation, employer contributions for employee health insurance, employer contributions to employee retirement plans, and state and local employment taxes paid by the employer.
  • FTE calculation method is defined.  For purposes of determining whether there is a reduction to forgiveness based on reduction in FTEs, the application provides direction on how to calculate the number of FTEs.
  • NEW exemption for Resignation, Voluntary Reduction and For-Cause Firing.  Provides an exemption to forgiveness reduction based on headcount reduction if the employee was terminated for cause, voluntarily resigned, or voluntarily requested and received a reduction in number of hours.
  • Lists documentation to be submitted or maintained.  The application provides a detailed list of the documentation that must be submitted to the lender along with the forgiveness application, as well as documentation that must be maintained by the borrower.

Action Steps:

  • Review calculation guidelines and model your expected forgiveness amount. 
  • Begin gathering documentation of relevant agreements and expenses.  

Visit our Resources Page to access up-to-date, curated guidance regarding COVID-19 Relief Programs (updated to include this new info) and Returning to Work Following COVID-19.

As always, you are welcome to call your ADVOS lawyer with any questions you have about the COVID-19 Relief Programs or returning to work following COVID-19.  We’re in this together and are on-call for you.

In your corner,

Whitney (+ the ADVOS team)