SBA Provides Application to Use in Applying for PPP Loan Forgiveness
On Friday, May 15, 2020, the Small Business Administration released the Paycheck Protection Program (PPP) Loan Forgiveness Application. The application is available here.
Employers that received a PPP Loan who wish to apply for forgiveness of the loan must complete this application as directed in the instructions provided. The application is then submitted to the lender that provided the loan (or the lender that is servicing the loan). The application requests extensive information on the costs paid and the employees retained by the employer.
The application provides instructions on determining the 8-week “covered period” during which the loan proceed must be used to pay for eligible costs, including a new concept called the “Alternative Payroll Covered Period” that is tied to the timing of the borrower’s pay periods. The application also provides some new detail regarding eligible payroll costs and eligible non-payroll costs. For example, it appears that both costs “incurred” and costs “paid” during the 8-week covered period can be included as eligible costs, although the implementation of these concepts still raises questions.
There is no deadline provided for submitting the application (although the application clearly cannot be submitted until after the end of the 8-week covered period).
We expect additional guidance from the SBA on the loan forgiveness requirements under the PPP and Stevens & Lee will provide an updated and more extensive client alert on these issues shortly.