The Small Business Administration on Friday announced new guidelines giving Paycheck Protection Program borrowers additional flexibility on the timing of forgivable payroll and utility payments. First, borrowers can choose to start their 8-week qualifying period on the date of their first payroll period after loan origination. Second, payroll and utility expenses incurred but not paid before the end of the 8-week period following loan origination can be forgiven, as long as they are paid on time.
The SBA also issued forgiveness calculation instructions, more flexible rehiring requirements, and the PPP forgiveness application form.
From the SBA announcement:
- Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
- Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
- Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
- Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
- Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined
Feel free to reach out to Rick or Mike directly for further clarification on PPP forgiveness, or ask your question via our Contact form.
