On May 15th the SBA released the Paycheck Protection Program Loan Forgiveness Application along with some key clarifications in completing the application process. The Forgiveness application is intended for small business owners whom received a PPP loan as part of the CARES Act.
The PPP Forgiveness application is comprised of 11 lines used to calculate the amount of forgiveness a small business owner is eligible for. All or part of the PPP loan may be forgiven as long as the small business used the funds for payroll, business mortgage interest, rent or utilities.
The newly-released application essentially asks for the payroll and qualifying non-payroll costs that the business spent over the eight-week period since receiving PPP funds. The amount of forgiveness may be reduced depending on whether a business reduced pay for their employees greater than 25 percent, or if the business owner failed to bring back the same number of full-time employees.
The final step in the application process is verification that the business owner allocated at least 75 percent of the PPP funds for payroll costs, and the remaining 25 percent for mortgage interest, rent or utilities.
To learn more about completing the Paycheck Protection Program Loan Forgiveness application and other information about the Paycheck Protection Program Loan go to the SBA website.
If you need help with your small business accounting and tax reporting, please give us a call.