Applying for PPP Forgiveness (As Of May 22 2020)
Summary
A slide presentation, Applying for PPP Forgiveness As Of May 22 2020, Based on the May 20 PPP Forgiveness Application, a 45 Minutes walk through Paycheck Protection Program forgiveness. One slide defines Payroll Cost from the Original IFR: salary, wages, commissions, cash tips, leave pay, separation allowances, group health care, retirement and state and local taxes on compensation. It describes the 11 pages of forgiveness forms, the eight-week (56-day) Covered Period, the FTE calculation, the $100,000 annual salary cap, the 25% limit on nonpayroll costs and the FTE Reduction Safe Harbor for borrowers who restored staffing by June 30, 2020, and notes that supporting documents must be kept for 6 Years. Closing slides list the SBA Houston District Office and its resource partners.
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Applying for PPP
Forgiveness
As Of May 22 2020
For The Next 45 Minutes or so…
Based on the May 20 PPP Forgiveness Application
This Presentation Will This Presentation Will Not
• Summarize eligible costs for • Go over detailed calculations
forgiveness • Review every line of every form,
• Review documents required schedule or worksheet
• Explain safe harbors and • Give specific advice for your
exceptions business
• Go over contents of
• Schedule A & Worksheet
• Application for Forgiveness
Agenda
1. Overview to the PPP Forgiveness Process
• Including required FTE calculation
2. Costs Eligible for Forgiveness
3. Documents Required
4. Forgiveness Application, emphasizing:
• Schedule A worksheet plus Safe Harbor & Exception
• Schedule A
• The Forgiveness Application
PPP Forgiveness Overview
Applying for PPP Loan Forgiveness
• Forgiveness Forms -11 pages
• Breaks into five pieces; 1 and 2 must be submitted to Lender:
1. PPP Forgiveness Application and Attestation (pp 3 & 4)
1. Application instructions (pp 1 & 2)
2. Schedule A (p 6)
1. Schedule A instructions (p 5)
3. Schedule A worksheet (p 9)
1. Schedule A worksheet instructions (pp 7-8)
4. Documents Required with Submission and Documents to Retain (p 10)
5. Borrower Demographics (p 11)
What You Submit
And back-up records that we will go over
Alternative Covered Period
Covered Period: eight-week (56-day) Covered Period of your PPP loan. The first day of the Covered Period
must be the same as the PPP Loan Disbursement Date.
Alternative Payroll Covered Period: Borrowers with a biweekly (or more frequent) payroll schedule may
elect to calculate eligible payroll costs using the eight-week (56-day) period that begins on the first day of
their first pay period following their PPP Loan Disbursement Date.
For example, if the Borrower received its PPP loan proceeds on Monday, April 20, and the first day of its first pay
period following its PPP loan disbursement is Sunday, April 26, the first day of the Alternative Payroll Covered Period
is April 26
Borrowers who elect to use the Alternative must apply the Alternative wherever there is a reference to “the
Covered Period or the Alternative Payroll Covered Period.”
However, Borrowers must apply the Covered Period (not the Alternative Payroll Covered Period) wherever
there is a reference to “the Covered Period” only.
8
Required FTE Calculation
The actual loan forgiveness amount that the Borrower will receive may be less,
depending on whether the Borrower’s average weekly number of FTE employees during
the Covered Period or the Alternative Payroll Covered Period was less than during the
Borrower’s chosen reference period.
For each employee, for the appropriate period (Covered or Alternate Covered)
1. Take the average number of hours paid per week, divide by 40, and round the total to
the nearest tenth.
2. The maximum for each employee is capped at 1.0.
3. Or, simply assign a 1.0 for employees who work 40 hours or more per week and 0.5 for
employees who work fewer hours
9
When Completing You Will Need
• PPP Forgiveness Application package:
• www.sba.gov/ppp under ‘Loan Details and Forgiveness
• Calendar
• Calculator
• Loan documents
• Business records for use when applying
• Patience and…
Smile!
Resource Partners of the SBA
Texas Gulf Coast WBEA Women’s Business Houston SCORE
Small Business Center (WBC)
Development Center (SBDC)
713-752-8444 713-681-9232 713-487-6565
www.sbdc.uh.edu www.wbea- www.houston.score.org
texas.org/womens-business-
center
12
SBA Resources
For EIDL Loan Applicants Houston District Office - SBA Other SBA District Offices
• 1-800-659-2955 • 713-773-6500 www.sba.gov/about-sba/sba-
• (TTY: 1-800-877-8339) locations
• Houston@sba.gov
• e-mail
disastercustomerservice@sb • Twitter: @SBA_Houston
a.gov
13
Costs Eligible for
Forgiveness
What is ‘Payroll Cost’
Original IFR III 2 ii f
Payroll costs consist of
• compensation to employees (whose principal place of residence is the United States) in the form
of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on
employer records of past tips or, in the absence of such records, a reasonable, good-faith
employer estimate of such tips);
• payment for vacation, parental, family, medical, or sick leave;
• allowance for separation or dismissal;
• payment for the provision of employee benefits consisting of group health care coverage,
including insurance premiums, and retirement;
• payment of state and local taxes assessed on compensation of employees;
• and for an independent contractor or sole proprietor,
• wage, commissions, income, or net earnings from self-employment or similar compensation.
Summary of Eligible Costs - Payroll
• Payroll costs paid and payroll costs incurred during the eight-week (56-day) Covered Period
• Payroll costs are considered paid on the day that paychecks are distributed or the Borrower
originates an ACH credit transaction.
• Payroll costs are considered incurred on the day that the employee’s pay is earned.
• Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered
Period are eligible for forgiveness if paid on or before the next regular payroll date.
• Otherwise, payroll costs must be paid during the Covered Period.
• For each individual employee, the total amount of cash compensation eligible for forgiveness
may not exceed an annual salary of $100,000, as prorated for the covered period.
• Count payroll costs that were both paid and incurred only once.
• For information on what qualifies as payroll costs, see Interim Final Rule on Paycheck Protection
Program posted on April 2, 2020 (85 FR 20811).
Summary of Eligible Costs – Non Payroll
• Covered mortgage obligations:
• payments of interest (not including any prepayment or payment of principal) on any
business mortgage obligation on real or personal property incurred before February 15,
2020
• Covered rent obligations:
• business rent or lease payments pursuant to lease agreements for real or personal
property in force before February 15, 2020
• Covered utility payments:
• business payments for a service for the distribution of electricity, gas, water,
transportation, telephone, or internet access for which service began before February 15,
2020
• An eligible nonpayroll cost must be paid during the Covered Period or incurred during
the Covered Period and paid on or before the next regular billing date, even if the
billing date is after the Covered Period.
• Eligible nonpayroll costs cannot exceed 25% of the total forgiveness amount.
• Count nonpayroll costs that were both paid and incurred only once
Documents Required
Documents to Submit for Payroll
Document to Submit for FTE
Documents to Submit for Non Payroll
Required to Keep (6 Years); Not Submit
PPP Forgiveness
Application
Schedule A Worksheet
Safe Harbor & Exception
Sched A Worksheet - Table 1
24
Sched A Worksheet - Table 2
25
FTE Reduction Safe Harbor
Borrower is exempt from the reduction in loan forgiveness based
on FTE employees described above 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
FTE Reduction Exception
Indicate the FTE of
1. any positions for which the Borrower made a good-faith, written offer to
rehire an employee during the Covered Period or the Alternative Payroll
Covered Period which was rejected by the employee; and
2. any employees who during the Covered Period or the Alternative Payroll
Covered Period
1. were fired for cause
2. voluntarily resigned, or
3. voluntarily requested and received a reduction of their hours.
3. In all of these cases, include these FTEs only if the position was not filled by
a new employee.
4. Any FTE reductions in these cases do not reduce the Borrower’s loan
forgiveness
PPP Forgiveness
Application
Schedule A
PPP Schedule A
PPP Schedule A
PPP Schedule A
PPP Schedule A
PPP Schedule A
PPP Forgiveness
Application
PPP Forgiveness Application pg 1
PPP Forgiveness Application pg 1
PPP Forgiveness Application pg 1
PPP Forgiveness Application pg 1
PPP Forgiveness Application pg 1
PPP Forgiveness Application pg 2
PPP Forgiveness Application pg 2
PPP Forgiveness Application pg 2
Smile!
SBA Resources
Texas Gulf Coast WBEA Women’s Business Houston SCORE
Small Business Center (WBC)
Development Center (SBDC)
713-752-8444 713-681-9232 713-487-6565
www.sbdc.uh.edu www.wbea- www.houston.score.org
texas.org/womens-business-
center
For EIDL Loan Applicants Houston District Office - SBA Other SBA District Offices
• 1-800-659-2955 • 713-773-6500 www.sba.gov/about-sba/sba-
• (TTY: 1-800-877-8339) locations
• Houston@sba.gov
• e-mail
disastercustomerservice@sb • Twitter: @SBA_Houston
a.gov
44
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