The SBA and Treasury have released the Paycheck Protection Program (PPP) Loan Forgiveness Application and instructions. The Application must be completed by the borrower and submitted to the lender. SBA states that regulations and additional guidance to assist borrowers and lenders will be released soon.
The form and instructions include:
- Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with the borrowers’ regular payroll cycles.
- Retention of the 25 percent limitation on non-payroll costs.
- Acknowledgment of the statutory safe harbor from loan forgiveness reductions based on full-time equivalent employees (FTEs) when i) the borrower reduced its FTE levels between February 15, 2020 and April 26. 2020, and ii) the borrower restored its FTE levels to the February 15, 2020 level by not later than June 30, 2020.
- A new exemption from FTE-based loan forgiveness reductions for borrowers that have made good faith, written offers to rehire employees but were rejected by the employees.
- An optional PPP Borrower Demographic Information Form, which seeks to identify for the principals of the borrower (e.g., officers, directors, general partners, key employees, members, or owners) their veteran status, gender, race, and ethnicity.
Borrowers may seek forgiveness of the loans at the conclusion of the eight week covered period, which begins with the disbursement of their loans.
The PPP Loan Forgiveness Application, the PPP Borrower Demographic Information Form, and instructions are available here.