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Two New Rules Released for PPP Loan Forgiveness

Posted by Admin Posted on May 28 2020

The Small Business Administration released additional guidance on Paycheck Protection Program (PPP) loan forgiveness. Some highlights from the two rules are outlined below.

Requirements for Loan Forgiveness

  • Bonuses and hazard pay, along with salary, wages and commission payments to furloughed employees, are all eligible for loan forgiveness. Payments cannot exceed the pro-rated amount of a $100,000 yearly salary.
  • Owner-employees and self-employed individuals are limited to the lesser of 8/52 of $100,000 or whatever their salary was in 2019, with a maximum of $15,385. 
  • Self-employed individuals will not receive additional loan forgiveness for retirement or health insurance contributions.
  • Advance payments on mortgage interest are not eligible.
  • As previously indicated, any employee who refuses a written offer of rehire will not result in a reduction in loan forgiveness. However, borrowers must notify the state unemployment office within 30 days of the employee’s offer rejection.

Loan Review Procedures & Related Borrower and Lender Responsibilities

  • Borrowers may appeal SBA determinations within 30 days of receiving them.
  • Lenders must decide on loan forgiveness within 60 days of receiving the completed application. Afterward, the SBA has 90 days to review the application.

 

For additional guidance, clarification and support, please contact your lender or a member of our team.