Part 20 – Client Alert > New PPP Loan Forgiveness FAQ

Dear Clients and Friends,

On August 4, 2020, after an almost 2 month hiatus, the SBA released new loan forgiveness guidance to PPP loan borrowers https://www.sba.gov/sites/default/files/2020-08/PPP Loan Forgiveness FAQs 8-4-20.pdf

Our summary of the main questions and answers are as follows:

  • Accelerate payments to maximize forgiveness? Earlier guidance said that expenses eligible for loan forgiveness included expenses paid or incurred during the Covered Period (CP) or the Alternative Payroll Covered Period (ACP). The FAQ clarifies that forgiveness is not provided for expenses for group health benefits or retirement benefits accelerated from periods outside the CP or ACP.
  • What if we modified leases and debt agreements during the CP? Remember, to be eligible for loan forgiveness, the expense or payment must be related to an agreement executed before February 15, 2020. The FAQ provides that leases or debt that expired or matured after February 15, 2020, and the lease or debt is renewed or extended, that the lease payment or mortgage interest is eligible for loan forgiveness.
  • What qualifies as transportation costs? Eligible transportation expenses for loan forgiveness refers to transportation utility fees assessed by state and local governments.

Please contact your BKM Sowan Horan team member if you need further assistance on this important development.

Richard J. Sowan

Managing Partner