Paycheck Protection Program (PPP)

The Paycheck Protection Program (PPP) through the U.S. Small Business Administration (SBA) is a lending program designed to provide a direct incentive for small businesses that have been affected by the COVID-19 pandemic to keep their workers on the payroll. The program is open to U.S. businesses with fewer than 500 employees — including sole proprietors, self-employed individuals, independent contractors and nonprofits — affected by COVID-19. Lenders began processing applications April 3, 2020, and the program has been extended through August 8, 2020.

One aspect of the loan that is especially appealing for businesses is the loan forgiveness. Businesses can qualify for loan forgiveness for amounts used for payroll costs, mortgage interest, and rent and utility payments during the covered period, if certain criteria are satisfied.

 

Download PPP Application

 

Calculating Loan Amounts

 

Paycheck Protection Program Flexibility Act of 2020

On June 5, 2020, the federal government responded again to further help small businesses weather the financial challenges by passing the Paycheck Protection Program Flexibility Act (PPPFA).  The PPPFA changes several provisions related to the forgiveness of loans under the PPP, making loan forgiveness much more achievable. Among other areas, that guidance addresses the calculation of full-time employees and total salary or wages for purposes of loan forgiveness reductions.

While the changes under the PPPFA will ease many of the burdens placed on businesses that received the loans, they may also add complexity too, at least for those business owners who already secured a PPP loan under the old rules and want to take advantage of the new ones. Additionally, there are still lingering questions left unanswered and further guidance needed.

For a full review of the new regulations, check out our article Paycheck Protection Program Flexibility Act Makes Significant Changes to the Forgiveness Provisions of PPP Loans.

Maximizing Loan Forgiveness

The goal for those with PPP loans is to have the maximum amount borrowed forgiven. Meeting the requirements for forgiveness is key, and it is imperative to have meticulous accounting and documentation of the spending of PPP funds to help ensure you receive the greatest loan forgiveness potential.

Applying for Loan Forgiveness

The Small Business Administration released an updated Paycheck Protection Program (PPP) Loan Forgiveness Application and Instructions that reflect the new guidelines enacted with the PPP Flexibility Act. The instructions contains a great deal of guidance and direction for calculating loan forgiveness, including helpful worksheets and step by step instructions, which clarified a few critical definitions and documentation requirements.

 

DOWNLOAD loan forgiveness APPLICATION

 

Download Loan Forgiveness Instructions

We Can Help

We recognize that navigating through all the information and understanding the process of tracking the spending of your PPP funds can be complicated and overwhelming. Our experts have remained up to date on the provisions of the CARES Act and the Paycheck Protection Program, and now the Paycheck Protection Program Flexibility Act, and have developed key strategies around the provisions.  We can assist you by providing clarity and direction so that you maximize your loan forgiveness.  We can assist you by providing clarity and direction so that you maximize your loan forgiveness.  Contact your Dannible & McKee professional today.

Additional Insights

For additional information on the Paycheck Protection Program and other COVID-19 related topics, visit our Coronavirus Resource Center.

Coronavirus Resource Center

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