The Small Business Administration (SBA) and the Treasury Department recently released the Paycheck Protection Program (PPP) Loan forgiveness application along with application instructions.
The form and instructions advise borrowers on how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security (CARES) Act. According to the administration, it aims to issue regulations that will further assist borrowers as they complete the application. The SBA also notes the importance of eligible non-payroll costs while applicants fill out the form.
“An eligible non-payroll cost must be paid during the covered period or incurred during the covered period and paid on or before the next regular billing date, even if the billing date is after the covered period. Eligible non-payroll costs cannot exceed 25% of the total forgiveness amount. Count non-payroll costs that were both paid and incurred only once,” a portion of the form reads.
The form also includes measures to reduce compliance burdens and simplify the process for borrowers, which includes 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; and step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.
To view the PPP Loan forgiveness application, click here.