Paycheck Protection Program (PPP) Loan Forgiveness: More On the Application Process
Treasury announced the possibility of PPP loans being totally forgiven. Or in part, depending on how good you make your application. Therefore, it is quite imperative that you understand the requirements of the application process. To increase your chances of being fully forgiven of the amount.
Below are the first things you need to understand before making the application. Your business must fulfill one of the following conditions;
- Your business (being referred to as the ‘borrower’), must be a self-employed individual, independent contractor, or sole proprietor. Who had no employees when you applied for the PPP loan. You must also haven’t included any employee salaries in the computation of average monthly payroll in the Borrower Application Form (SBA Form 2483).
- Must not have reduced employee salaries by more than 25% during the ‘covered period’. You must also haven’t reduced the number of employees or their working hours between 1 January 2020 and the covered period.
- Besides the above, your business must have only failed to operate because of the guidelines issued by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.
In light of the above, the covered period is the period between the initial issuance of the PPP loans. And their expiration date. The initial covered period was 8 weeks and was extended to 24 weeks.
Nevertheless, here is more on what you need to know;
- The Covered Period is either the 24-week period beginning on the PPP Loan Disbursement Date or, if the Borrower received its PPP loan before June 5, 2020, the Borrower may elect to use an eight-week (56-day) Covered Period.
- Treasury has provided more information on how the Forgiveness Amount will be calculated.
If any of the above contains something you don’t understand, it is important that you get in touch with us to fully understand. Some omissions may cost your business tens of thousands, we both don’t want that to happen. Get in touch with us and have all the relevant information explained to you.