Do You Qualify to Get Your PPP Loan Funds Forgiven?
Updated: Mar 22
The Small Business Administration in consultation with the Treasury has been keeping and updating a Paycheck Protection Program FAQ on their website. The most recent updates were issued on May 5, 2020 and there’s notable guidance related to loan forgiveness calculations. It’s also worth highlighting the retroactive guidance related to the loan “necessity” certification.
1. LOAN FORGIVENESS CALCULATION
If your business received Paycheck Protection Program loan funds, you could exclude laid-off employees from loan forgiveness reduction calculations IF the employee in question turns down a written offer to be rehired. The written re-employment offer must be made by the employer in good faith with the same salary, wages and hours. In order to exclude a laid-off employee from the loan forgiveness calculation, the employer must have documentation of the declined offer. The SBA warned that employees who reject offers of reemployment may become ineligible to continue receiving unemployment benefits.
For more information about this topic, you can visit the SBA PPP FAQ at the link below. Questions #40-42 deal with this topic.
2. RETROACTIVE GUIDANCE ISSUED ON LOAN “NECESSITY” CERTIFICATION – SAFE HARBOR PROVIDED UNTIL MAY 14
The SBA issued retroactive guidance that PPP applicants must consider their access to outside sources of liquidity before certifying that the current economic hardships make the loan a “necessity”. Because this guidance has been issued retroactively, a safe harbor has been provided during which time PPP loans can be repaid if a company determines that its certification of “necessity” is no longer valid given the new guidance. The safe harbor period is in effect until May 14.
For more information about this topic, you can visit the SBA PPP FAQ at the link below. Questions #31, #37, #43 deal with this topic.
LINK TO SBA PPP FAQ:
Please reach out to a member of your client service team at FAL with any questions about Paycheck Protection Program loan funds or send us an email at firstname.lastname@example.org.