![]() Safe Harbor: There is no reduction in the forgivable loan amount for borrowers who reduced their FTEs during the period beginning on February 15 and ending on April 26, 2020, but who by no later than Decemrestored the FTEs to the level that existed on February 15. The borrower is able to document the inability to return to their Februlevel of business activity due to compliance with social distancing or other customer safety requirements The borrower is unable to rehire individuals who were employees on Februand unable to hire similarly qualified employees for unfiled positions before December 31, 2020 ![]() In the case of a seasonal employer a consecutive 12-week period between May 1 and September 15, 2019Įxceptions: Borrowers will not be penalized for any FTE reductions if either of the following occurred: Borrowers can choose between the following reference periods: The borrower’s loan forgiveness will be reduced if the average number of weekly full-time equivalent employees (FTEs) during the 24-week period is less than the average number of FTEs during the borrower's chosen reference period. Determine loan forgiveness reduction based on a reduction in the average number of employees. Specifically, if by not later than December 31, 2020, the employee’s annual salary or hourly wage is equal to or greater than their annual salary or hourly wage on February 15, 2020, the borrower’s loan forgiveness is not reduced.ĢB. Safe Harbor: Borrowers can avoid having their loan forgiveness amount reduced if they restore an employee’s pay. The amount of the reduction in loan forgiveness is based on the amount of the reduction in pay. Determine loan forgiveness reduction based on a reduction in salaries or wages of more than 25%:įor employees who earned $100,000 or less in 2019 (or were not employed by the borrower in 2019), the borrower’s loan forgiveness will be reduced for each employee whose average pay (salary or hourly wage) during the 24-week period is less than 75% of their average pay from the full quarter prior to the 24-week period (for most borrowers: January 1 to March 31, 2020). Determine the amount, if any, by which the maximum loan forgiveness will be reducedĢA. For example, if the loan was disbursed on April 20, the last day of the 56 days would be October 4).Ģ. Tip: If you are using an online date calculator, remember to count the date of the disbursement of the loan as part of the 168 days. The 24 weeks (168 days) beginning on the day the PPP loan was disbursed orįor borrowers with a biweekly (or more frequent) payroll schedule, the 24 weeks (168 days) beginning on the first day of the first pay period following the PPP loan disbursement. The 24-week period during which expenses must be incurred or paid: The COVID Revenue Reduction Score can be accessed on SBA’s online PPP direct forgiveness portal here. In situations where borrowers did not submit revenue reduction documentation at the time of the PPP loan application, the SBA is offering an alternative form of revenue reduction authentication through an independent third-party contractor. A list of the participating lenders can be found here. In August 2021, SBA created a “COVID Revenue Reduction Score” for use with the agency’s online PPP direct forgiveness portal.īorrowers must first determine whether their lender has opted in to SBA’s online PPP direct forgiveness portal. Amount of possible loan forgiveness for PPP loans of $150,000 or less: Determine the maximum amount of possible loan forgivenessġA. The process to calculate the amount of loan forgiveness requires three steps:ĭetermine the maximum amount of possible loan forgiveness based on the borrower’s expenditures during the 24 weeks after the loan is made ĭetermine the amount, if any, by which the maximum loan forgiveness will be reduced because of reduced employment or reduced salaries and wages andĪpply the 60% rule that requires that at least 60% of eligible loan forgiveness expenses go towards payroll costs.ġ. You can get the most up-to-date information here. ![]() The Small Business Administration (SBA) is responsible for the parameters on loan forgiveness. Loans may be forgiven if borrowers used the proceeds to maintain their payrolls and pay other specific expenses. This guide is designed to help borrowers understand the process by which their loan forgiveness amount will be calculated and the overall approach of the loan forgiveness process. Your PPP loan will come due soon, if it hasn't already. If you have a question about your application or forgiveness, talk with your lender. ![]() Small businesses received PPP loans from private or non-profit lenders. Existing borrowers may be eligible for PPP loan forgiveness. Note: The PPP ended and stopped accepting applications on May 31, 2021. The Paycheck Protection Program (PPP) was created to help businesses keep their workforce employed during COVID-19. ![]()
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