Now that you have your Paycheck Protection Program Loan, you have a new set of challenges to consider:
- Should I use the Covered Payroll Period, which begins on the eight-week (56 days) of the day that the loan was disbursed or the Alternative Covered Period, which begins on the first day of the first pay period following the disbursement of the funds?
- Does the Alternative Covered Period include nonpayroll costs?
- How should I consider incurred vs. paid in my calculations for payroll and nonpayroll costs?
- Am I eligible for the “safe harbor” calculation regarding salary and FTE reductions?
- How do I calculate FTEs?
- If I am an owner of the business and didn’t take compensation in 2019, can I take compensation during the covered period and will it be eligible for forgiveness?
- What documentation will be required to apply for loan forgiveness?
- How do I prepare thorough documentation for my lender to support my application for loan forgiveness?
- Will I be “audited” by the SBA? If so, how can I prepare?
The Small Business Administration released its Paycheck Protection Program (PPP) Loan Forgiveness Application and additional guidance earlier this month. These clear up several vague or confusing issues we have discussed previously but do not answer all our questions. With everything else you have on your plate right now, you could probably use a little (or a lot of) help.