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Maintain Eligibility for PPP Forgiveness
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Did you get the PPP loan and now you are concerned about making sure the loan is fully forgiven? Check out this great video from colleague, Chelsea Whalley of J Donovan Financial.
U.S. small businesses that were able to secure financial relief through the SBA’s Payroll Protection Program should consider the following to help their cause for qualification of forgiveness of the full principal amount of the loan and any accrued interest:
• Use the loan funds only toward: payroll, including salary, wages, tips and covered benefits for employees; rent or mortgage interest; and utilities.
• Ensure at least 75% of loan funds are allocated for payroll costs.
• Maintain the level of full-time employee (FTE) headcount without reduction during the eight-week covered period.
• Maintain the salaries and wages of your workforce during the eight-week covered period. Any reduction of more than 25% for any employee who makes less than $100,000 will reduce the amount forgiven.
• Preserve proper documentation to support the amount of proceeds used for payroll costs, rent or mortgage, and utilities.
• Prior to June 30, 2020, restore all full-time employment and salary levels back from any reductions made between Feb. 15, 2020, and April 26, 2020. As mentioned above, preserving proper documentation is important, as this information will be used by your lender when evaluating whether an employer qualifies for PPP loan forgiveness.
For more information regarding loan forgiveness eligibility, go to the following link:
Video on how to APPLY for Forgiveness will be released tomorrow!
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Susan L. Combs
Susan L. Combs, founder and CEO of Combs & Company, is a visionary leader transforming the insurance industry with innovation, integrity, and a commitment to educating and empowering every client.
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