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Month: May 2020

Latest PPP Loan Forgiveness Guidance Released: Fails to Address Two Key Requirements

On Friday May 22nd, the Small Business Administration (SBA) and the Treasury Department issued two new Interim Final Rules (IFR): one covering Loan Forgiveness and the other covering Loan Review Procedures.  The loan forgiveness guidance, which builds upon the loan forgiveness application and instructions that were released May 15th, still does not make changes to provisions for the 75/25 requirement to spend PPP funds on payroll and non-payroll costs, or the 8-week (56-day) covered...

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PPP Loan Forgiveness Application – Overview of Required Documentation

By Tricia Meola On May 15th, the Small Business Administration released the highly anticipated Paycheck Protection Program Loan Forgiveness Application. The application is lengthy, the calculations are complex, and the instructions aren’t the most straight-forward. At first (and second) glance, the application process is quite overwhelming!  In order to assist you, we are going to break down the components beginning here with the four main areas of required documentation. Please...

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SBA Releases Paycheck Protection Program Loan Forgiveness Application

By Travis Miskowitz On Friday May 15th, the Small Business Administration released the long-awaited Paycheck Protection Program (“PPP”) loan forgiveness application.  The forgiveness application includes detailed instructions for borrowers to calculate their eligible costs and determine the amount of PPP loan forgiveness. The form provides more guidance than previously available, but still not as clear as we’d hoped.  There are still unanswered questions and we anticipate additional...

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SBA Clarifies Safe Harbor Status for Loans Under $2 Million

By Travis Miskowitz  On 5/13/2020, the SBA issued FAQ 46 which grants Safe Harbor status to all loans under $2MM. Small businesses received a welcome update today via SBA FAQ 46 which states that businesses, including their affiliates, that accepted Paycheck Protection Program loans of $2 million or less, will be assumed to have performed the required certification in good faith. The PPP application requires small business owners to certify in good faith that “current economic uncertainty...

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Are You Applying For the PPP in Good Faith? How to Document Your PPP Loan Application Decision

By Travis Miskowitz One important aspect of applying for a PPP loan is certifying in good faith that your loan request is necessary. The PPP application asks you whether “current economic uncertainty makes your loan request necessary to support your ongoing operations.” We have put together this list of considerations to help you assess in good faith and officially justify your need for this emergency funding. Read this today to ensure your business has made an informed decision...

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Expenses Relating to PPP Forgiveness are Nondeductible

By Evan Gernant On Thursday, April 30, the IRS issued Notice 2020-32 clarifying that to the extent a Paycheck Protection Program (PPP) loan is forgiven, the associated expenses will be nondeductible for federal tax purposes.  The CARES Act made it clear that any amount of forgiveness of a PPP loan would be non-taxable.  What was not addressed and left for interpretation was whether the associated expenses would be tax-deductible.  Many were hopeful for a better ruling from the IRS...

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Frequently Asked Questions About the Families First Coronavirus Response Act

By Lisa Calick I’ve been forced to furlough my employees due to a slowdown in business operations.  Are they still eligible for the leave entitlements as part of the Families First Coronavirus Response Act? Unfortunately no.  If you have furloughed your employees because there is not enough work for them, they are not entitled to take paid sick leave or expanded family and medical leave under the Act.  They may, however, be eligible for unemployment benefits through your State. Many...

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Do You Need to Return Your PPP Loan? SBA Clarifies Eligibility Guidance Through FAQ Update

By Travis Miskowitz Update: As of Wednesday, May 6, the safe-harbor deadline for returning PPP funds has been extended to May 14. Complete the application, provide supporting documentation, and you should be well on your way to a forgivable loan. All the better since you must spend the money on payroll costs in order to receive forgiveness. It is called Paycheck Protection after all, right? Not so fast according to recent updates published by the SBA. The SBA has recently issued...

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