On Friday, May 22, 2020, the Small Business Administration issued a pair of documents containing much-needed guidance for borrowers and lenders participating in the SBA’s Paycheck Protection Program (PPP).
The first document (SBA-2020-0032) addresses several key points about the PPP loan forgiveness process, including critical clarification regarding eligible payroll costs to be considered under loan forgiveness, expanded information about non-payroll costs included in loan forgiveness, and circumstances that require reductions to the amount forgiven for each loan. The guidance further contains specific examples of situations like how to handle when funding of the loan takes place in between payroll cycles or if wages, salaries, and commissions paid to furloughed workers are included under the broad umbrella of compensation.
The companion guidance, issued on the 22nd as well (SBA-2020-0033), contains information geared toward lenders that are reviewing the supporting documentation and considering what costs are ultimately eligible for loan forgiveness. Information contained in this guidance provides borrowers insight into how they can expect lenders to address accumulated qualifying expenses and keeps all lenders focused in the same way across the board; a process that is aimed at minimizing variation from one lending institution to another and inadvertently providing unintended benefit to one group of borrowers over another.
Be sure to reach out to your LGT advisor with any questions while you are going through this lending and forgiveness process. Additionally, follow our YouTube channel if you missed the latest webinar, ”PPP Loans: Forgiveness Guidelines" on this subject and more.
LGT cares about you and your business. Don't forget to follow all of our past webinars on our YouTube channel. And don't miss out on our great upcoming webinars coming soon.
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