PPP Loan Forgiveness Application Now Available!
The SBA has released Form 3508, Paycheck Protection Program Loan Forgiveness Application, providing additional clarity and official guidance on the forgiveness of loan proceeds.
Alternative Payroll Covered Period – there is a bit of flexibility in the covered period such that borrowers with at least a bi-weekly pay cycle may elect to align the start of their 8-week covered period with the first day of their first pay period following their loan disbursement date.
Definition of Full-Time Equivalent – the FTE calculation can be simplified at the election of the borrower such that employees who work 40 hours/week are valued at 1.0 and employees who work less than 40 hours/week are valued at 0.5. Otherwise, the calculation for each employee is their average number of hours paid/week divided by 40 (rounded to the nearest tenth).
75% Rule – clarification that there is an established 75% limitation on the amount of forgiveness based on forgivable payroll costs.
Business Owners – special rule limiting increases in compensation to business owners during the covered period, capping the forgivable portion of amounts paid to owners at the lesser of $15,385 or the 8-week equivalent of their 2019 compensation.
Covered Rent – expands the definition of forgivable rent obligations beyond just real property leases to include rent associated with personal property leases (provided the lease agreement was in effect prior to February 15, 2020).
June 30 Restoration Date – provides an exemption from the reduction in loan forgiveness related to FTEs for those borrowers that reduced their FTE employee levels between February 15, 2020 and April 26, 2020, but subsequently restore it by June 30, 2020 to their February 15, 2020 level.
Safe Harbor – borrowers with proceeds under $2M are provided “safe harbor” from audits or penalties in relation to their certification that the necessity of the loan request was in good faith.
You can find the application here.
If you would like assistance completing the application and/or calculating your forgiveness amount, contact us now. #WeKnowHow!