The Small Business Administration and Treasury Department this evening released the application that borrowers must complete in order to have their Paycheck Protection Program loan forgiven. The form includes detailed information about the costs that are eligible for forgiveness and instructions for calculating those costs.
SBA announced several measures intended to reduce compliance burden and simplify the forgiveness process for borrowers, including a safe harbor from loan forgiveness reduction for borrowers that were able to rehire employees who had previously been let go or laid off by June 30, 2020. It also included an exemption from forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined.
Additionally, SBA provided an option for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with their regular payroll cycles, and flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan.
SBA noted that it will soon issue regulations and additional guidance for borrowers on completing the forgiveness form, as well as guidance for lenders detailing their responsibilities.