On May 28, 2020, the US House of Representatives passed by a wide margin a bill that extends the time frame for the PPP forgiveness from 8 weeks to 24 weeks. The bill was designed to correct what many perceive as the CARES Act Paycheck Protection Program’s failure to assist hard hit businesses. The Senate has been working on a bi-partisan bill that would extend the PPP period to 16 weeks. We should expect a compromise bill to be passed in the near future.
The Small Business Administration released its PPP Loan Forgiveness Calculation Form (SBA Form 3508) and its instruction. After analyzing the form and its instruction we have concluded that making the required calculations and providing the requested documents will take significant time and effort. You will need detailed payroll records, documentations of the use of proceeds and backup for the qualified expenses.
The SBA rules now allow businesses to choose an alternate date for the commence of the eight week payroll period. You may choose the start of this period to be the date that payroll commences in lieu of the date that the PPP proceeds were received.
What to expect:
We participated in a Webinar with SBA officials on the subject of PPP Forgiveness that revealed that many of the particulars of the forgiveness process have not been worked out. It appears that the SBA is committed to being flexible on the application of its terms but specifics on the corrections have yet to be finalized. Our questions were frequently answered with a shrug and that the answer has yet to be determined.
A copy of SBA Form 3508 and its instruction can be downloaded from our website. Please take time to go over this form and what is required to complete it. If you have questions or in need of assistance to not hesitate to contact us.
Good luck and most of all be careful and stay healthy.