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Paycheck Protection Program
Five Rules for PPP Borrowers

April 24, 2020

You Were Approved... Now What?

The application and approval process for the SBA Paycheck Protection Program moved quickly. We know you might have some questions!
While program specifications are continuously developing, we want to prepare you with some quick tips that will set you up for success.

It's A Loan, Not A Grant

A PPP loan is eligible for forgiveness by the SBA if program rules are followed. Our goal is to help you achieve maximum forgiveness, so there is no outstanding balance for you to repay in 8 weeks.

Pay Your People

If you have employees, use PPP funds for payroll costs over the 8-week period beginning on the date of loan disbursement. 75% or more must be used exclusively for this purpose.

If you don’t have employees, the forgiveness amount will be limited to an 8-week portion of Net Income per your PPP application.

The definition of payroll costs, exclusions, and how to use funds can be found on pages 3-5 of the Interim Final Rule below.

INTERIM FINAL RULE

Keep Your People

If you have employees, strive to maintain the headcount that was provided at application. Forgiveness is based on maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

Keep Your Records

Borrower documentation similar to the records provided during the application process will be used to determine eligibility for forgiveness. Documentation should support costs such as payroll, rent, utilities, interest on debts, etc.

Additional rules are expected soon from the SBA regarding specific requirements. Please consult your tax and/or legal adviser as soon as possible to ensure accurate financial reporting.

Stay Updated

Follow updates and changes to the PPP over the course of your loan, as these could affect the amount you owe.

SMALL BUSINESS ADMINISTRATION

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Stay up-to-date on the latest PPP news.

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