The program was designed specifically for small businesses with 500 employees or less, but after the first round of funding was depleted by larger businesses receiving the loans, Mnuchin decided to implement a new, stricter protocol with the implementation of audits and a few loan forgiveness adjustments.
In order to apply for forgiveness, a business owner must include payroll and non-payroll costs that were spent over the eight-week period, since the SBA PPP funds were put into your account. Business owners are also required to bring back the same number of employees as pre-coronavirus. You must also identify who qualifies as a full-time employee, in order to ensure you bring back the same amount of employees pre-pandemic.
The costs that will be considered forgiven are payroll costs during the eight-week period, beginning at the first disbursement. As well as mortgage interest on a property, business rent or lease payments for real or personal property, and any utility payments during the eight week period before February 15.
Payroll costs that will be forgiven must be employees whose total compensation, excluding health insurance, retirement, contributions, and other benefits, cannot go beyond $100,000 prorated for the eight weeks.
In the forgiveness application, you should also include any payroll paperwork, accounting records, and other information that illustrates your effort to maintain normal business with the loan amount.
There are still a few loan forgiveness terms being adjusted for the SBA PPP Loan. First, Congress is looking to extend the time period for submitting your forgiveness application, potentially going up to 24 weeks. As well as potentially making the ‘spend’ period to 12 weeks instead of eight.
To ensure all your funds are allocated correctly, use our TGG PPP Payroll Tracker. At TGG, we want to help you get your funding and get your loans forgiven! As you continue to navigate funding for your business, visit our COVID-19 Resource page to find out what the best option for your company is and how to be prepared for applying for these programs.