Alert: PPP Loan Forgiveness Update from Your Part-Time Controller, LLC
Updated Loan Forgiveness Applications and Instructions for the Paycheck Protection Program (PPP)
June 24, 2020
Dear Clients and Friends,
We wanted to share with you that the Small Business Administration (SBA) and the Treasury have released an updated Loan Forgiveness Application and Instructions for the Paycheck Protection Program (PPP). The applications reflect changes to the PPP due to the signing of the Paycheck Protection Program Flexibility Act of 2020 (PPPFA), which extended the Covered Period from 8 weeks to the earlier of 24 weeks or December 31, 2020.
Below are highlights from the updated applications and SBA guidance:
- Payroll Costs Requirement – The new guidance clarified that the PPPFA amendment to reduce the payroll costs requirement from 75% to 60% is a proportional limit on payroll costs (as a share of the loan forgiveness amount) rather than a threshold for receiving any loan forgiveness – good news!
- Alternative Payroll Covered Period – Borrowers still have the option to elect an Alternative Payroll Covered Period (APCP), whether they choose an 8-week or a 24-week Covered Period. As a reminder, an APCP would begin on the first day of the first pay period following PPP loan disbursement.
- Cash Compensation – The total amount of cash compensation eligible for forgiveness per employee is $15,385 for an 8-week Covered Period and $46,154 for a 24-week Covered Period.
- Safe Harbor – When determining whether safe harbors are met for any FTE or Salary/Hourly wage reductions, a Borrower can use the earlier of: 12/31/20, and the date of the loan forgiveness application. In other words, Borrowers do not have to wait until 12/31/20 to apply for loan forgiveness if using the safe harbors.
- Certifications – The updated instructions modified the Borrower representations and certifications to include the 60% payroll costs requirement and added representations for the inability to operate at the same level of business activity as before February 15, 2020 due to compliance with COVID-19 safety requirements (for Borrowers requesting an FTE Reduction Safe Harbor).
The PPP loan program still has funds available until June 30th! You can view a list of participating lenders here.
As always, YPTC is here to help! Access our Staying Afloat Resources web page for information and resources to help your organization stay financially afloat during these times of uncertainty.
YPTC offers Paycheck Protection Program Loan Forgiveness Calculation Services.