The Small Business Administration (SBA) has updated its guidance on Loan Forgiveness.
Updated information from the SBA:
The SBA indicated it will be updating its Paycheck Protection Program Loan Forgiveness Application. We outline some of the anticipated changes below:
You now have up to a 24-week Covered Period (previously 8 weeks) to spend loan funds starting the date loan funds were deposited into your business checking account.
You must use at least 60% of funds for eligible payroll costs to qualify for full Loan Forgiveness, down from 75%.
You can use up to 40% of funds for eligible non-payroll costs, up from 25%.
If you apply for Forgiveness, you won’t have to start making payments until the SBA makes a decision or remits the funds. You generally have to submit a Forgiveness request within 10 months after the 24-week Covered Period ends.
If you don’t apply for Forgiveness, you won’t have to start making payments until 10 months after the 24-week Covered Period ends.
You may be able to use FTE Safe Harbor provisions if you have fewer full-time equivalent (FTE) employees now if you document an inability to:
Rehire individuals who were employees as of February 15, 2020
Hire similarly qualified employees for unfilled positions on or before December 31, 2020
Return to the same level of business activity before February 15, 2020 due to compliance with requirements or guidance from the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration from March 1, 2020 through December 31, 2020, related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19
The SBA will likely update its PPP Schedule A Worksheet that you’ll use to prepare your online Forgiveness request.
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