Definitive Guide to PPP Loan Forgiveness

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We have FINALLY more guidance for PPP loan forgiveness. The PPP loan forgiveness application has been launched. After reading through the application I realized this is not nearly as simple as I had hoped so I made this guide you can follow along through your forgiveness application and feel confident it was filled out correctly.

List of PPP lenders that don't require an existing bank account download link: https://mailchi.mp/26ef0b5a86af/ppp-l...

See how large of a forgivable loan you are eligible for! Download the PPP Calculator here: https://mailchi.mp/e7f3ad1f1f91/ppp-v...

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SBA's PPP Forgiveness Application:
https://www.sba.gov/sites/default/fil...

How to Get PPP Loan Forgiveness

To apply for forgiveness on your loan you will have to fill out this application and submit it to your lender so strap in so you can get familiar with it.

In this video I go over the paycheck protection forgiveness application and give more context on sections that I believe that needed a better explanation.

Required Definitions:

Covered Period / Alternative Payroll Covered Period. This will come up a lot.

As you know the forgiveness of your PPP loan is based on the 8 week (56 day period) after you receive funding. Well, a major issue with the funding of the PPP was under the original language it seemed that only payrolls paid within the 8 week period could potentially be forgiven.

This would cause an accounting nightmare where companies would have to change the dates in which employees were paid in order to actually receive forgiveness for all of the days worked because let’s say your company pays its employees every other Friday and you received PPP funding on the Monday before payroll under the original guidance those first 4 days (mon-thursday) wouldn’t be covered.

Under the new, clarified guidance the SBA has said you will be able to choose whether the forgiveness period starts the day you received funding (referred to as the ‘covered period’) or you can choose an alternative period to align with your payrolls (referred to as Alternative Payroll Covered Period)

If you choose the Alternative Payroll Covered Period that period will begin the first day of the first pay-period after you receive the PPP funds in your account. So for example if you received PPP funds on the 6th of May and your next payroll starts on the 10th of May you can elect the 8 weeks to start of the 10th and the forgiveness period would extend 56 days from the 10th (or whatever day you choose in your scenario)

Going back to our example of the business who was funded on the 6th but the next payroll starts on the 10th. If that company decides to take the Alternative Payroll Covered Period route (which they should) it’s important to note that only payroll and payroll related expenses like payroll tax and health insurance will be covered under the alternative period. Your other expenses like rent or mortgage payments, interest, and utilities will still be tracked under the covered period (in this case starting on the 6th of May) That makes it a little more confusing, I know but this is how they want it done.

I'm running out of space in this description to write everything out so you'll have to watch the video for the rest of the info, feel free to skip around (figuratively or literally, it's your life, do what you want ;) ).

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Disclaimer
This presentation does not constitute legal or tax advice. It is provided solely for informational and educational purposes and does not fully address the complexity of the issues or all the steps businesses must take under applicable laws. You should consult your professional advisers regarding your individual situation. Max Maher undertakes no obligation to update the information in this presentation, and no representations are made that the content is error-free.