• PPP Loan Information

  • The US Chamber of Commerce has published a terrific guide on the PPP Forgiveness. Download Here.
    You will be able to apply for forgiveness of your PPP Loan after June 1 (depending on when you received your loan - you may apply for forgiveness at the end of the first payroll period following the 8 weeks after loan disbursement.
    • For full forgiveness, you will need to spend the entire amount of your loan
    • You will have to spend your loan proceeds on eligible expenses
    • At least 75% of your expenditures will need to be for payroll
    • You will have to restore the number of employees (measured in FTEs) to prior levels (average monthly number of employees in 2019). You have until June 30 to restaff.
    • Total individual employee wages during the 8-week period, divided by eight must be no less than 75% of the individual employee's average weekly wages during Q1 2020.

    See a copy of the PPP Loan Forgiveness Application HERE.

    Some notes:

    Borrowers will have their loans forgiven if they use the money for designated expenses. Participants are eligible for loan forgiveness for the amounts spent on authorized expenses over the eight weeks after receiving the loan.

    Total payments for payroll over the eight weeks after the loan is disbursed may be forgivable. Mortgage interest, rent and utilities are also forgivable, up to 25% of the PPP loan. (Note that if your loan is forgiven, theses expenses covered by the loan are not tax-deductible, the IRS recently stated in Notice 2020-32.)

    To get the entire amount of the loan forgiven (assuming that at least 75% is spent on payroll and the rest on permitted expenses), you must meet two criteria. First, the full-time employee head count cannot decline from average monthly levels during 2019 or during the past 12 months. If your business launched in the second half of 2019, you can use average head counts from January 1, 2020 to February 29, 2020. If your business is seasonal, you can base your monthly averages on numbers from February 15, 2019 or March 1, 2019 to June 30, 2019.

    Second, for loans to become full grants, employers cannot cut salaries or wages. If they do, the forgiven amount will be reduced. Employers who already let workers go (between February 15 and April 26, 2020) have until June 30 to restaff.

    Instead of having to use your loan to cover the eight weeks right after loan disbursement, borrowers can start with the first pay period after the loan disbursement. (So if you receive the loan on Thursday, and your next pay period starts on Sunday, you can start with that Sunday pay period.)

    Borrowers are not required to report all allowed non-payroll costs (i.e., rent, mortgage interest and utilities) if they don’t want to include them in the forgiveness amount. Before, there was some confusion over this; the flexibility may help borrowers keep their non-payroll costs within the required percentage (25%).

    The SBA recognizes that some employees who have been let go may get new jobs or some may be fired with cause. You can use FTE equivalents to make up the difference.

    Getting Ready to Apply for Forgiveness

    Tracking your expenses during your PPP loan period is critical to applying for forgiveness as you will be required to provide documentation. Several lenders have developed tracking tools. Here is an example from Mascoma Bank