PPP Loan Forgiveness
Many of you reading this have received, or will soon receive, the Payroll Protection Program (PPP) loan. And that’s good news. Not surprisingly, however, this distribution now shifts the focus to “what qualifies as forgiveness under this program?”
As of now if you spend at least 75% on payroll costs over an 8-week period, from the date you received the funds, you’re on your way to full loan forgiveness. Conversely, if less than 75% of the funds are spent on payroll, loan forgiveness will be reduced.
The forgiveness rules are still a work in progress that require careful navigation with only a limited map to help. While we aren’t sure of some of the particulars (i.e., calculations, documentation), we will need these to determine specific forgiveness amounts relative to the PPP.
Unfortunately, there is as much ambiguity and uncertainty concerning PPP loan forgiveness as there was with obtaining a PPP loan (at least before the SBA and the U.S. Treasury provided some clarity). We anticipate that the SBA will provide guidance on forgiveness. Once those guidelines are released, we will have the information to assist you in determining the amount of your loan that will be forgiven and discuss all options at that point in time.
We strongly recommend that you continue to run your business in the best way possible, without getting too distracted by or focused on the forgiveness mechanism. We will, of course, assist you through the forgiveness process, just as we did the application process. In fact, we will be developing and conducting webinars on this so we can disseminate information as quickly and effectively as possible.
These are difficult times for everyone, but as always, we remain dedicated to helping you navigate the process.
We wish all of you continued good health and safety.