May 16, 2020 SBA/Treasury released detailed guidance on PPP loan forgiveness

May 16, 2020 SBA/Treasury released detailed guidance on PPP loan forgiveness

May 19, 2020 | Symphona

SBA and Treasury released detailed guidance on PPP loan forgiveness on May 16, 2020.  Here are some of the highlights:

  • For borrowers using a bi-weekly or more frequent payroll schedule, the new guidance allows for an Alternative Payroll Covered Period that will align with the borrower’s pay cycle.  This will eliminate the need to start the 8 week period on the date the funds are deposited into the checking account.
  • Many  have been concerned about the incurred and paid time table with eligible expenses being incurred during the 8 week period but not actually due or paid until after the 8 week period is up.  The new guidance allows for eligible expenses that were incurred and paid by the next billing cycle to be included in the forgiveness calculation.  This eliminates the need to “estimate” and pay the eligible expenses by the end of the 8 week period.  This change includes payroll and non-payroll eligible expenses.
  • The current guidance requires a reduction in the final forgiveness amount if the number of full-time equivalent employees (FTE) is less than the previous FTE headcount from a selected reference period.  Further clarification was given on the FTE Reduction Exception which allows employers to NOT be penalized by any employee who (1) rejected a good faith, written offer of employment (2) were fired for cause or (3) voluntarily requested and received a reduction of their hours.
  • A safe harbor exempts certain borrowers from the loan forgiveness reduction based on FTE employee levels.  Specifically, the Borrower is exempt from the reduction in loan forgiveness based on FTE employees if both of the following conditions are met: (1) the Borrower reduced its FTE employee levels in the period beginning February 15, 2020, and ending April 26, 2020; and (2) the Borrower then restored its FTE employee levels by not later than June 30, 2020 to its FTE employee levels in the Borrower’s pay period that included February 15, 2020.
  • The actual forgiveness form along with instructions can be found by clicking here or go to

HOWEVER, many industry advisors including the American Institute of Certified Public Accountants continue to push for additional flexibility for small businesses  and to clarify further certain requirements of the forgiveness process.

Please reach out to us if you should have any other questions and concerns.  Check back frequently to our COVID19 resource page at

We are in this together!