PPP Loan Forgiveness

The Paycheck Protection Program (PPP) for businesses and the self-employed has been a hot topic for the last few months. In summary, under this program the Small Business Administration provides loans to businesses to assist in keeping their workers on payroll and cover essential costs such as rent and utilities during the COVID-19 pandemic. The key attribute of this program is that the loan is eligible for forgiveness to the extent that the loan proceeds are used for specific expenses, namely payroll, rent, and certain utilities. The recipient has up to 24 weeks from the receipt of the loan to use the funds for those qualified expenses (at least a 60% for payroll and up to 40% for rent and utilities) in order to be eligible for forgiveness of a portion or all of the loan.  Each situation is unique to the loan recipient, so we highly recommend speaking with your DKC representative before finalizing your approach with the loan proceeds.

Since the PPP program was rushed out to aid those in need as quickly as possible, final guidance regarding the loan forgiveness process and qualifications has not yet been issued. With the prospect of a second round of COVID-19 relief from the US Government, there is a greater chance that there will be a delay to the issuance of this guidance and potentially more changes to the rules associated with PPP loans and factors for loan forgiveness.

The SBA is not accepting applications for forgiveness until they implement a new internal software which is scheduled to go-live on August 10th.  On Tuesday, the Small Business Administration issued an FAQ on the Paycheck Protection Program (PPP) loan forgiveness application process in an attempt to clarify costs eligible for forgiveness and reduction calculations, among other things.

Your representative at DKC is monitoring the situation and will keep you updated as developments and further guidance becomes available. If you have any questions, feel free to reach out.