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  • Writer's pictureSteve Spiech

PPP Loan Forgiveness. Are you ready to be forgiven?

Updated: Nov 14, 2020

The Cares Act Paycheck Protection Program (PPP) loan forgiveness process is underway with many companies having run through their 24 week covered period and applying for forgiveness for all or part of their PPP loans. Many banks are still not ready to receive these applications so now is a good time to be well prepared if you haven’t already submitted.

By now you should have pulled together your payroll and other qualified expenses and have a good estimate for the amount of forgiveness you expect to be granted. If you do not expect all of your loan to be forgiven - especially if you have a large FTE reduction factor - it may make sense to wait until December 31, 2020 to see if you meet the FTE safe harbor. This safe harbor triggers if you have more FTEs when you file for forgiveness compared to the pay period inclusive of February 15, 2020. It may also make sense to look at other allowable FTE calculation methods to see if one method provides less reduction than another.

If you do expect to be fully forgiven then the next step is to gather all of your supporting documentation to have it ready for your bank. The better you can support each of your numbers the quicker and easier the forgiveness process will be . The bank will have 60 days to review your forgiveness application and determine how much of the loan is forgivable once you submit it to them. Once the bank submits it to the SBA, the SBA has 90 days to review the PPP loan forgiveness application and accept or reject the bank's decision.

We have experience with PPP loan forgiveness applications and FTE calculation methods. Contact us if you need some help.

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