As the June 30, 2020 deadline for acquiring a Paycheck Protection Program Loan (PPP Loan) approaches, borrowers remain faced with a number of details that may impact PPP Loan forgiveness. Below are a list of updates and reminders as borrowers begin to work with their CPA and lender on preparing for loan forgiveness. 

• The Paycheck Protection Program Flexibility Act of 2020 (Act) offered borrowers a number of adjustments for consideration. The intention of the Act was to provide borrowers with flexibility in the use of PPP Loans and potential loan forgiveness. The details of the Act are available here.
• Two updated PPP Loan Forgiveness applications were issued on June 16, 2020, the standard application and an EZ application. While the structure of the standard form remained unchanged, the application addressed some questions not otherwise answered by the Act mentioned above.
• The EZ version of the PPP Loan forgiveness application is available to borrowers who certify they meet one of the following criteria:
  • The borrower is a self-employed individual, an independent contractor, or a sole proprietor who had no employees and did not include any employee payroll in the average monthly payroll when they applied for the PPP Loan.
  • The borrower is not subject to the salary and wage reduction limitation on forgiveness during the covered period AND did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the covered period.
  • The borrower is not subject to the salary and wage reduction limitation on forgiveness during the covered period AND was unable to operate during the covered period at the same level of business activity as before February 15, 2020 due to compliance with sanitation, social distancing, or work / customer safety requirements and standards established 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.
  • It is important to remember that despite qualifying for the EZ version of the PPP Loan forgiveness application, borrowers must maintain detailed documentation supporting the certification qualifying them for the simplified application. Thus, the borrower must maintain records showing decreases to average salaries did not exceed 25% for any employee and records showing that full-time equivalents did not decrease compared to certain reference periods. Also, documentation regarding the sanitation, social distancing, and work / customer safety requirements and standards applicable to each borrower location must be maintained.

• The Small Business Administration (SBA) and the Department of the Treasury (Treasury) struck an agreement with bipartisan leaders of the Senate Small Business Committee to share additional information regarding PPP Loan borrowers with the public. For loans of $150,000 or more, the disclosures will include the business name, address, NAICS code, zip code, business type, demographic data, non-profit information, and jobs supported grouped by loan amount ranges.

It is still expected that the SBA will issue additional guidance addressing many unanswered questions about PPP Loan forgiveness. RubinBrown is constantly monitoring SBA and Treasury releases and will be holding a webinar to provide a comprehensive yet practical review of PPP loan forgiveness after this information is released.

If you have question regarding PPP Loans please contact your RubinBrown team member for assistance.

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