The much-anticipated guidance from the SBA pertaining to the forgiveness calculation of Paycheck Protection Program (PPP) loans was released on May 15th.
The guidance comes in the form of a forgiveness application. The application is 11 pages long and can be downloaded from the SBA’s website following this link: https://www.sba.gov/sites/default/files/2020-05/3245-0407%20SBA%20Form%203508%20PPP%20Forgiveness%20Application.pdf
The application is to be completed by the borrower and submitted to their lender. It includes detailed instructions on how to calculate the loan forgiveness. We will be studying the application and providing guidance to our clients to assist in its accurate filing with their lender. Please stay tuned for more information.
Also note that on May 13th, the SBA updated the FAQ’s on its website: https://www.sba.gov/sites/default/files/2020-05/Paycheck-Protection-Program-Frequently-Asked-Questions_05%2013%2020_2.pdf
Question 46 of the FAQ indicates that: “Any borrower that, together with its affiliates,received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”
It also indicates that:“Importantly, borrowers with loans greater than $2 million that do not satisfy this safe harbor may still have an adequate basis for making the required good-faith certification, based on their individual circumstances in light of the language of the certification and SBA guidance. SBA has previously stated that all PPP loans in excess of $2 million, and other PPP loans as appropriate, will be subject to review by SBA for compliance with program requirements set forth in the PPP Interim Final Rules and in the Borrower Application Form. If SBA determines in the course of its review that a borrower lacked an adequate basis for the required certification concerning the necessity of the loan request, SBA will seek repayment of the outstanding PPP loan balance and will inform the lender that the borrower is not eligible for loan forgiveness.”
Our team is working diligently to stay abreast of all developments regarding the PPP and other government programs providing COVID-19 relief. Please reach out to your AZ consultant with any questions you may have.
Our team continues to seek resources and updated information on the COVID-19 crisis. Please reach out to us with any questions! We are happy to help.