PPP Loan Forgiveness Update

The new SBA Paycheck Protection Program (PPP) Loan Forgiveness Worksheet is out. Along with the 4 page application are detailed instructions on how to calculate forgiveness and submit your request to your bank when the 8 week period is over.

We recently sent out a spreadsheet to help our clients project and then track their forgiveness during the 8-week period. That worksheet has worked well for the primary payroll and non-payroll criteria, but the SBA has released a far more detailed picture as to what can be forgiven and how to incorporate employees that won’t return, reduced salaries and reduced Full Time Equivalent (FTE) headcounts.

We first want to make sure that one piece of information is corrected, the SBA has chosen to utilize a 40 hour week to calculate your FTE headcount. Our original seminar included using both a 30 hour and a 40 hour work to calculate FTE. We suggested using the 30 hour because that was the safer option, but it is clear now that using the 40 hour workweek will be sufficient.

The PPP Loan Forgiveness Application is made up of 4 sections. It will be a complicated process, in some sense, you start in the middle, go backwards and then finally complete the process.

We will be providing a seminar in the coming weeks that will help you complete this process, but here are highlights:

PPP Loan Forgiveness Calculation Form and Instructions

This is the primary application that includes the final numbers you will be presenting to your bank.

You’ll need your original loan information and the information calculated on the following 2 worksheets.

PPP Schedule A

In this section you will list your payroll costs and FTE headcounts that you will use on your primary application form. You’ll need to have on hand any employee benefits paid, and information on cash compensation and FTE’s calculated using the PPP Schedule A Worksheet.

PPP Schedule A Worksheet and Instructions

This section helps you calculate the salary and FTE headcount information needed to complete the PPP Schedule A. You’ll need your payroll registers showing all employees paid and total wages paid during the 8 week period.

PPP Loan Forgiveness Documentation

This final section details the documentation you need to submit a complete application, including the forms above. You’ll need sufficient documentation to demonstrate your FTE headcount during one of the lookback periods including, payroll registers, state and federal payroll tax reports and copies of receipts for your non-payroll expenses. There are additional documents you should retain which are detail in this final section as well.

As mentioned earlier, this is a complicated process and will take time and information to complete. We recommend that you utilize the services of competent CPA or accountant to help you ensure maximum forgiveness.

Please be on the lookout for our upcoming webinar on completing your PPP Loan Forgiveness Application.