Payroll Protection Program
Under the Paycheck Protection Program (PPP), small business owners can apply for approximately 2.5x their average qualified monthly payroll expenses, up to $10 million, to be used for eligible payroll costs and other certain operating costs, including rent, mortgage interest, and utilities. The loans are intended to keep employees on payroll and keep small businesses and other eligible organizations in operation.
Additionally, PPP loans may be forgivable, in whole or in part, if certain requirements are met. Business owners using PPP funds to maintain payroll and cover certain operating expenses may not be required to repay their loans if they meet certain criteria. Among others, these criteria include
Using at least 60% of the funds to cover eligible payroll expenses.
Maintaining the same number of employees on the payroll and rehiring employees who were previously laid off before December 31, 2020, or before the date you submit your loan forgiveness application, whichever comes first.
Maintaining employee salaries and wages and restoring salaries and wages by December 31, 2020, or before the date you submit your loan forgiveness application, whichever comes first.
Borrowers seeking loan forgiveness for PPP loans can apply for forgiveness through their lenders. They’ll need to verify the number of employees on the payroll and their pay rates during the loan forgiveness covered period after their loan was disbursed.
Creating a payroll report may help verify these numbers and expedite the auditing process.
The U.S. Small Business Administration (SBA), in consultation with Treasury, released a revised loan forgiveness application for the Paycheck Protection Program (PPP). The SBA also unveiled a new EZ application for forgiveness of PPP loans.
The applications reflect changes to the PPP made by the Paycheck Protection Flexibility Act of 2020, P.L. 116-142, which became law June 5.
PPP loan and forgiveness calculations and eligibility may vary. We can help you to assess what is eligible and create the report needed to share with your lender.