May 2020 – SBA Releases PPP Forgiveness Applications and Instructions

The U.S. Small Business Administration (SBA), in consultation with the Department of the Treasury, released an application form last Friday for Paycheck Protection Program (PPP) loan forgiveness along with instructions for completing the form. Please see attached, total 11 pages.

Also, the basic calculation is still as we discussed before.

Below is a summary regarding the calculation of the Full time employee (FTE) safe harbor and documentation requirements which you can see the detail on page 8, and page 10 of the attached file.

  • FTE Reduction Safe Harbor
    A safe harbor under applicable law and regulation exempts certain borrowers from the loan forgiveness reduction based on FTE employee levels. Specifically, the Borrower is exempt from the reduction in loan forgiveness based on FTE employees described above if both of the following conditions are met: (1) the Borrower reduced its FTE employee levels in the period beginning February 15, 2020, and ending April 26, 2020; and (2) the Borrower then restored its FTE employee levels by not later than June 30, 2020 to its FTE employee levels in the Borrower’s pay period that included February 15, 2020.

Documents that Each Borrower Must Submit with its PPP Loan Forgiveness Application

Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following:

1. Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.

2. Tax forms-Form 941 or TWC

3. Payment receipts, cancelled checks,

 

FTE: Documentation showing (at the election of the Borrower):

1. The average number of FTE employees on payroll per month employed by the  borrower between February 15, 2019 and June 30, 2019;

2. The average number of FTE employees on payroll per month employed by the borrower between January 1, 2020 and February 29, 2020; or

 

For documentation for Non-Payroll expenses and other documents requirement, please refer to page 10 of the form.

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