As another year comes to a close, we recommend finding time to reflect on 2021…
The SBA released a new document late last night with more clarifications on the PPP loan forgiveness guidelines. They also included some guidance for banks to follow in their procedures for reviewing forgiveness applications.
We wanted to get this out ASAP in case you are working on your PPP loan forgiveness application over the holiday weekend.
A word of caution, however: the forgiveness rules for PPP loans may change dramatically if Congress passes the new legislation currently being formulated.
Just a quick review of what we see:
- You’ll find guidance on dates that determine covered payroll periods. This latest SBA document gives great examples of how to handle unique pay periods (like bi-weekly or semi-monthly) if your pay periods don’t exactly coincide with the 8-week period that started on the date you received your PPP funds. The good news is there is no need for a special payroll within the 8-week time period to make sure all payroll costs are accrued and paid within the time frame. The portion accrued and not paid in the period is still counted toward forgiveness.
- The document reiterates the current 75%/25% rule for payroll costs vs other acceptable expenses. It also clarified that bonuses, commissions, and hazard pay are covered payroll expenses that are included in the forgiveness calculations.
- It has additional information on how employee attrition impact headcounts and salaries mandates for 100% forgiveness. Specifically, it addresses employees that left on their own accord, were fired or refused to return to work. Please make sure you make you document everything when it comes to employee attrition!!
- SBA Docket Number SBA-2020-0032 – This is the new SBA release offering guidance to businesses for PPP loan forgiveness.
- SBA Docket Number SBA-2020-0033 – This is the new SBA release offering guidance to lenders regarding fees and audits of PPP loans and forgiveness requests.
Sorry to bother you on your holiday weekend, but I thought this was important.