What can small businesses seeking PPP loan forgiveness learn from the program’s latest application? In a recent article by Inc. magazine, Chuck Morton, co-chair of Venable’s Corporate Group, was quoted on the release of new information for small businesses that took paycheck protection loans. According to the article, the U.S. Treasury and Small Business Administration’s eleven-page loan forgiveness application clarifies a number of administrative queries.
Prior to the application's release, it wasn't clear if a business owner had to spend the full amount of a Paycheck Protection Program loan within the eight-week covered period to receive any forgiveness. Indeed, some feared that loan forgiveness depended on a business owner's ability to spend 75 percent of a loan's proceeds on payroll costs within the short eight-week covered period.
The application confirms that any amount spent during the covered period on allowable expenses, like payroll costs or rent, may be forgiven, but not all of a loan's proceeds must be exhausted during the eight-week period.
“There's still a significant incentive to have the money spent over the eight weeks“ to get a loan forgiven, says Morton. “What this says now is that at least it's not all or nothing.“
Click here to access the article.