On Friday, May 15, the Small Business Administration (SBA) released the Paycheck Protection Program (PPP) loan forgiveness application and instructions. The form and instructions inform borrowers how to apply for forgiveness for a PPP loan, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
The SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.
The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
- 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 good-faith, written offers to rehire workers that were declined
The documents released on Friday will help small businesses seek forgiveness at the conclusion of the eight-week covered period, which begins with the disbursement of their loans.