On August 4, 2020 the Small Business Administration provided further guidance to Payroll Protection Program (“PPP”) borrowers in the form of a series of frequently asked questions (“FAQs”) involving the PPP’s loan forgiveness component. Unfortunately, many of the questions involve items that were previously addressed within the PPP’s general FAQs, the interim final rules and the loan forgiveness application and instructions. However, the forgiveness PPP FAQs at least provide the answers in one place.
The forgiveness FAQs shed some new light on loan forgiveness for payroll and non-payroll costs. For payroll costs, Question #2, under Loan Forgiveness Payroll Costs FAQs, provides that payroll costs that were incurred before the Covered Period but paid during the Covered Period are eligible for loan forgiveness.
For nonpayroll costs, Question #5, under Loan Forgiveness Nonpayroll Costs FAQs, reflects that payments made on leases, and the interest portion of payments made on secured loans that existed on February 15, 2020, and that were subsequently either renewed or refinanced after February 15th are eligible for forgiveness. In addition, Question #7 addresses in the affirmative the question whether electric supply charges that are billed separately from electric distribution charges are eligible for forgiveness.
Click here for the PPP's loan forgiveness FAQs.