Yes. Create a separate bank account in the name of the firm – identical to the name as used in your PPP Loan application and have the funds deposited in that account to create a clear record of the spending.

The original program required the funds to be spent within eight (8) weeks of funding, but recently the program was changed to allow borrowers to spend the funds by twenty-four (24) weeks from the funding date or December 31, 2020; whichever is earlier. The covered period is the election of the borrower.

Spend the remaining funds in accordance with the loan requirements and apply for forgiveness soon. You don’t have to wait 24 weeks for forgiveness. Alternatively, if you spend the funds but do not apply for forgiveness immediately, your repayment schedule will be deferred although interest will accrue on the loan.

You can apply at the conclusion of your Covered Period (8 weeks up to 24 weeks), or as soon as you have spent all of the funds.

It could be several months. Federal law and program guidelines give lenders 60 days to process PPP Loan forgiveness applications and then the SBA has 90 days to review the lenders’ submittals.

To be eligible for full PPP loan forgiveness, the most recent legislation and SBA guidance require a borrower to spend at least 60% of the loan on payroll including health care benefits and employer-paid taxes. You can seek forgiveness for up to 24 weeks of payroll, limited to $46,154 per employee and not including owners. There are separate payroll limitations for owners.

Yes. PPP Loan forgiveness will be reduced if there is a reduction in employees unless:

• Rehired by December 31, 2020;
• An individual refuses, in writing, an opportunity to return to work;
• The employer is unable to hire the same or similarly qualitied employees; or
• The employer can document “the inability to return to the same level of business activity as such business was operating at before February 15, 2020, due to compliance with requirements established or guidance 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 during the period beginning on March 1, 2020, and ending 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 borrowers may elect to measure their baseline employee count as the average number of FTE employees on payroll per month employed by the PPP borrower between February 15, 2019 and June 30, 2019. However, a borrower can also elect to use the average FTE from January 1, 2020 through February 29, 2020 as the baseline for measuring employee retention.

In the case of a seasonal employer, the average number of FTE employees on payroll per month employed by the borrower between February 15, 2019 and June 30, 2019; between January 1, 2020 and February 29, 2020; or any consecutive twelve week period between May 1, 2019 and September 15, 2019.

The PPP Loan is an actual loan that must be repaid, less the portion that is forgiven. If the SBA approves forgiveness of a large portion of your loan, but not all of the loan, the remaining balance must be repaid. For example: if you borrowed $100,000 and the SBA approves forgiveness for 90% of the loan, you would have to repay 10% or $10,000.

PPP Loans are a fixed rate loan at 1.0% per year for the life of the loan. The original term of these loans was 2 years but the federal government has provided the option to extend the loan to 5 years with mutual agreement of borrower and lender.

Payment of principal and interest is deferred until the lender receives payment of the forgiven portion of the loan; or for 10-months after the end of the covered period if there was no application for forgiveness.

No. You can pay the unforgiveness balance of your PPP Loan immediately, or faster than the amortization schedule with no penalty.

The SBA EIDL Disaster Loan Advance will be subtracted from the forgiven amount.

Yes. For borrowers that received a PPP loan before June 5, 2020 and elect to use an eight-week covered period, the amount of loan forgiveness requested for owner-employees and self-employed individuals’ payroll compensation is capped at eight weeks’ worth (8/52) of 2019 compensation (i.e., approximately 15.38 percent of 2019 compensation) or $15,385 per individual, whichever is less, in total across all businesses. For all other borrowers, the amount of loan forgiveness requested for owner-employees and self-employed individuals’ payroll compensation is capped at 2.5 months’ worth (2.5/12) of 2019 compensation (i.e., approximately 20.83 percent of 2019 compensation) or $20,833 per individual, whichever is less, in total across all businesses.

Payments to purchase health care benefits for employees are eligible expenditures for PPP Loan forgiveness, but payments for health benefits for firm owners are not eligible for forgiveness.