In order to complete your PPP forgiveness application;
If you received $50,000 or less, you will need the following information handy:
- The EIDL advance amount, if any, that you received
- The EIDL application number
- The business’ bank statements for your covered period that begins as of the date the PPP funds were received. Your covered period was either the 8 or 24 weeks that you elected.
- The payroll journals for the same period listed in # 3 for either the 8 or 24 week period. These journals should include:
- Employee contribution for the employee health insurance
- Employee contributions to retirement plans
- State unemployment insurance
- Each employee’s gross pay, payroll deductions, net pay and hours worked
- Quarterly Forms 941
- State quarterly business and individual employee wage reporting and unemployment insurance tax filings
- Eligible non-payroll costs:
- In order to include rent paid, you will need a copy of the lease and copies of the cancelled checks starting 2/15/20.
- Copies of the invoices for electricity, gas, water, telephone, internet service and proof of payment (cancelled checks) starting 2/15/20
- Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans starting 2/15/20
If your company received more than $50,000, you will need the above information plus:
- The last payroll journal you had in 2019. For each employee it should include:
- Employee retirement contribution
- Employee health insurance contribution
- Hours worked
- The amount the employer paid for their health insurance and into their retirement plan
- The same information listed in # 1 and # 2 but for the period 1/1/20 to 3/31/20
Please note if you were unable to restore the employee full time equivalent headcount before 12/31/20, there is no reduction in potential loan forgiveness if, “in good faith” you can document the following:
- Inability to rehire individual who were employees as of 2/15/20
- Inability to hire similarly qualified employees for unfilled positions on or before 12/31/20 -or-
- Inability to return to same level of business activity as such business was operating at before 2/25/20 due to compliance with requirements established or guidance issued by HHS, CDC, OSHA during the period 3/15/20 to 12/31/20 related to maintenance of the standards for sanitation, social distancing or any other worker or customer safety requirement related to COVID-19
The rules have changed regarding the safe harbor full forgiveness. Under the initial CARES ACT, the businesses that rehired their employees by June 30, 2020 were entitled to full forgiveness but that date no longer applies. Under the second phase of the CARES ACT you need to have rehired your entire staff by the earlier of; the day you file for forgiveness or December 31, 2020. This has the unfortunate effect of negating full forgiveness if the business met the initial safe harbor date of June 30, 2020.
The borrower must retain all documentation in its files for six years after the date the loan is forgiven or repaid in full and permit authorized representatives of the SBA, including representatives of its Office of Inspector General, to access such files upon request.
Diapoules & Feinstein will gladly help you prepare the PPP loan forgiveness application. As you can understand, our work will be made easier if you forward us a complete set of the required documents.
If you have any questions or seek guidance we have posted on our website the SBA FAQ on the PPP Loan Forgiveness process or you can call our office at 631-547-1040.