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CLIENT ALERT: PPP Loan Forgiveness Application Available

Home > Media > Announcements > CLIENT ALERT: PPP Loan Forgiveness Application Available

Dear Clients and Friends:

 

Abrams Fensterman, LLP is committed to providing our clients with up to date information and assistance for your business needs in order to address Coronavirus-related business concerns. This article provides updates related to the CARES Act Paycheck Protection Program (PPP) Loan Forgiveness Application.

 

On Friday, May 15, the Small Business Administration (SBA) and Treasury issued the application borrowers of a Paycheck Protection Program (PPP) loan must use to determine the amount of the loan that may be “forgiven” by their lender (SBA Form 3508). The Form 3508 application has four components: (1) the PPP Loan Forgiveness Calculation Form; (2) PPP Schedule A; (3) the PPP Schedule A Worksheet; and (4) an (optional) PPP Borrower Demographic Information Form. Borrowers are required to submit items (1) and (2) to their lender.

 

Please note that the SBA’s guidance provides for four broad categories of costs that are eligible for forgiveness: (1) payroll costs; (2) business mortgage interest payments; (3) business rent or lease payments; and (4) business utility payments. Forgiveness is generally available for costs incurred with respect to these items during the borrower’s “Covered Period,” which is the eight-week period that starts on the date the PPP loan was distributed. The SBA’s direction allows a PPP borrower to deduct payroll costs both “paid” or “incurred” during the borrower’s eight-week Covered Period. Under the guidance, payroll costs are considered paid on the day that paychecks are distributed or that the borrower originates an ACH credit transaction. Payroll costs are considered incurred on the day that the employee earned the pay. This distinction allows employers some flexibility in timing their use of PPP funds.

 

If you have questions before applying for loan forgiveness or need any other help with the application, please contact Melanie I. Wiener, Esq. at [email protected] or Melody Schor, Esq. at [email protected] to schedule a consultation with one of our attorneys who is ready to assist you through this difficult time.

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