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PPP LOAN FORGIVENESS AND LOAN REVIEW

Your top questions and answers on the Small Business Administration's Paycheck Protection Program loan forgiveness process and loan review.

  • A27) Is the loan forgivable?

  • A29) Under what conditions would the loan not be forgiven by SBA?

  • A30) What risk does the lender incur if the borrower does not follow the PPP program’s criteria?

  • A48) How does the applicant consider federal payroll taxes when determining payroll costs to compute the maximum loan amount, allowable uses of the loan, and loan forgiveness?

  • A49) How does PPP loan forgiveness operate?

  • A72) What documentation will a self-employed individual be required to submit to the lender when requesting loan forgiveness?

  • A73) For self-employed individuals, what amounts are eligible for forgiveness?

  • A99) Will a borrower’s PPP loan forgiveness amount be reduced if the borrower laid off an employee, offered to rehire the same employee, but the employee declined the offer?

  • A118) Is the loan forgivable?

  • A121) When does the required twenty-four-week period begin that the borrower uses to determine their payroll costs?

  • A123) Under what conditions would the loan not be forgiven by SBA?

  • A124) Will SBA review individual PPP loan files?

  • A125) What is the general process to obtain loan forgiveness?

  • A126) When must payroll costs be incurred and/or paid to be eligible for forgiveness?

  • A127) For self-employed individuals, what amounts are eligible for forgiveness?

  • A128) Are salary, wages, or commission payments to furloughed employees; bonuses; or hazard pay during the covered period eligible for loan forgiveness?

  • A129) Are there caps on the amount of loan forgiveness available for owner-employees and self-employed individuals’ own payroll compensation?

  • A130) When must nonpayroll costs be incurred and/or paid to be eligible for forgiveness?

  • A131) Are advance payments of interest on mortgage obligations eligible for loan forgiveness?

  • A132) Will the loan forgiveness amount be reduced if the borrower laid-off or reduced hours of an employee, then offered to rehire that employee for the same salary and number of hours, or restore the reduction in hours, but the employee declines?

  • A133) What effect does a reduction in a borrower’s number of full-time equivalent (FTE) employees have on the loan forgiveness amount?

  • A134) What does “full-time equivalent employee” (FTE) mean and how should a borrower calculate its number of full-time equivalent (FTE) employees?

  • A135) What effect does a borrower’s reduction in employees’ salary or wages have on the loan forgiveness amount?

  • A136) How should borrowers seeking loan forgiveness account for the reduction based on a reduction in the number of employees (Section 1106(d)(2)) relative to the reduction relating to salary and wages (Section 1106(d)(3))?

  • A137) If a borrower restores reductions made to employee salaries and wages or FTE employees by not later than December 31, 2020, can the borrower avoid a reduction in its loan forgiveness amount?

  • A138) Will a borrower’s loan forgiveness amount be reduced if an employee is fired for cause, voluntarily resigns, or voluntarily requests a schedule reduction?

  • A139) What must borrowers submit for forgiveness of their PPP loans?

  • A140) What should a lender review in the PPP loan forgiveness application?

  • A141) What is the timeline for the lender’s decision on a loan forgiveness application?

  • A142) What borrower representations and statements will SBA review?

  • A143) When will SBA undertake a loan review?

  • A145) What should a lender do if it receives notice that SBA is reviewing a loan?

  • A150) When should a borrower’s EIDL loan be refinanced as part of its PPP loan?

  • A151) May fishing boat owners include payroll costs in their PPP loan applications that are attributable to crewmembers described in Section 3121(b)(20) of the Internal Revenue Code?

  • A152) May a fishing boat owner include as payroll costs in its application for loan forgiveness any compensation paid to a crewmember who received his or her own PPP loan and is seeking forgiveness?




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