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Breaking news! On Friday, May 15 the SBA published the PPP loan forgiveness form with instructions and made some important modifications to the process.
The attached form is new and complex, so bankers, borrowers and their attorneys and CPAs will need time to understand how the form is to be completed.
The major takeaways from these instructions, according to CPA and industry expert Robert Keebler, are the following:
1. The loan form is to be filed with lender.
2. Alternative payroll methods are allowed to better match the specific company’s payroll period.
3. The 75% non-statutory payroll test is retained.
4. The application form tests for all 3 loan forgiveness reductions.
5. The critical loan forgiveness phrase “paid and incurred” is still not fully defined
6. Fraud warnings are still present in the borrower certifications, so the SBA will continue to monitor loans for fraudulent use.
7. If the borrowing company restores headcount and salaries, the ratio and salary percentage test will not apply.
Thanks to Stephen Allow at Mutual of Omaha Advanced Markets for sharing this information.
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