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On August 4, 2020, the Small Business Association (SBA) released 10 pages of FAQs pertaining to loan forgiveness under the Paycheck Protection Program (PPP).
The PPP is part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, which was enacted in March 2020 to allow small employers to seek a PPP loan to help bridge the cost of maintaining employees during the COVID-19 crisis. The CARES Act was amended by the Paycheck Flexibility Act to increase flexibility in eligibility for PPP loan forgiveness by increasing the timeframe of the period covered by the loan from 8 weeks to 24 weeks, adding exemptions based on employee availability, reducing the payroll cost requirement from 75% to 60%, and extending the period to pay the loan.
The SBA’s FAQs provide further guidance and clarity to these amended provisions, including additional instructions to the Loan Forgiveness Application (SBA Form 3508) and illustrative examples.
