SBA Releases PPP Loan Forgiveness Application

On May 15th, the Small Business Association released the Paycheck Protection Program’s (PPP) Loan Forgiveness Application, providing much needed guidance for borrowers, as forgiveness is top of mind for many PPP recipients. The application details calculations for forgivable payroll and expenses, average full-time equivalent (FTE) employees, FTE headcount reductions, and documentation requirements.

Most notably, the application opines on an “Alternative Payroll Covered Period”, where “Borrowers with a biweekly (or more frequent) payroll schedule may elect to calculate eligible payroll costs using the eight-week (56-day) period that begins on the first day of their first pay period following their PPP Loan Disbursement Date. For example, if the Borrower received its PPP loan proceeds on Monday, April 20, and the first day of its first pay period following its PPP loan disbursement is Sunday, April 26, the first day of the Alternative Payroll Covered Period is April 26 and the last day of the Alternative Payroll Covered Period is Saturday, June 20”.