PPP Loan Forgiveness Update: What To Do Now!
Many questions remain regarding the Small Business Administration Paycheck Protection Program and the loan forgiveness process. GreenStone remains committed to supporting those members who submitted their SBA PPP loan application through us, during this next phase of loan forgiveness.
The Department of the Treasury issued the loan forgiveness application for PPP loans late on Friday, May 15. We are working to understand the requirements and finalize our loan forgiveness application process. While we anticipate additional changes to the application could be announced over the coming weeks, we are working quickly with our online vendor (the same vendor we successfully used to submit many of the loan applications to SBA) to finalize the process our members will use to submit the forgiveness application and the necessary supporting documents to us. Customers who submitted their PPP loan application through GreenStone will receive additional direction from us as soon as we have further information.
Those interested in PPP loan forgiveness should use the information below and seek the most updated details from the SBA website and FAQs. The current forgiveness application is also available on the SBA website as a PDF. In addition, as you work through this “Expense Tracking & Reporting” phase, we have outlined the below information to help members be as informed and proactive as possible.
What we do know:
- Funds must be used on eligible expenses in the eight-week period following your PPP loan disbursement (forgiveness period).
- We have not opened our online forgiveness application portal at this time. Additional communication and next steps will be provided once the portal is available.
- Eligible expenses include payroll, rent, interest and utilities.
- 75% of the loan proceeds must be used on payroll expenses, with the remaining 25% allowable on rent, interest and utilities.
What you should be doing now:
- Payroll amounts (capped at $100,000 annualized for any one person) should be supported by underlying payroll reports, including provider payroll reports, unemployment filings, and documents verifying any retirement and health insurance contributions.
- Other eligible costs for agreements in effect prior to February 15, 2020, including rent, interest, and utilities should be supported by:
- Lease agreements
- Account statements and invoices
- Copies of canceled checks or support for payment
- Bank statements should be retained with eligible expenses highlighted supporting payment
- Full-Time Equivalents (FTE): Payroll reports should be available to support FTEs on payroll and their pay rates for the period used in the application and forgiveness periods (see PPP Schedule A Worksheet).
- Self-Employment Income: Forgiveness will be capped at 8/52nd’s of 2019 SE income. We are waiting for clarification on what will be required to substantiate forgiveness amounts.
A successful forgiveness application will require appropriate decisions and excellent recordkeeping. Using the above information, in addition to the details provided on the SBA website and in the PPP FAQs, you can take appropriate steps now to be prepared.
We know everyone is anxious for answers and clarification – we are too! We have an internal task force of experts working with SBA to understand all the details as they are provided to us. As information is released, we’ll continue to update this blog and send communications to our SBA PPP loan application members as quickly as possible. While this may be like the loan application process, requiring us to all learn together, we are committed to our members and will work with you to get it done!
Should you have any questions, please reach out to your financial services officer or tax accountant. They may not have an immediate answer, but it’s helpful to understand your questions now so we can work to meet your specific needs.
