May 15 the U.S. Small Business Administration (SBA) and Department of the Treasury released the Paycheck Protection Program (PPP) Loan Forgiveness Application and Instructions for borrowers. The form and instructions inform borrowers on how to apply for forgiveness of their PPP loans under the CARES Act. Additionally, SBA is expected to issue regulations and guidance soon to assist borrowers further as they complete their applications.
The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
- Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
- Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
- Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
- Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
- Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined