Now that the Paycheck Protection Program (PPP) loan application period has ended, businesses that have taken PPP loans are concerned about meeting eligibility for loan forgiveness. PPP loans are generally forgivable if a business uses at least 60% of the loan proceeds for eligible payroll costs over a covered period of eight weeks or 24 weeks, according to the period the borrower selected. Non-payroll costs also are eligible for forgiveness if they meet certain eligibility requirements.
The Small Business Association (SBA) and the U.S. Treasury issued interim final rules (IFR) in late August that provide additional guidance on eligible expenses related to PPP loan forgiveness. The SBA is responsible for administering these loans. The intent was to provide clarification and guidance on the ownership percentage that triggers the owner compensation rule for forgiveness and the eligibility limits on forgiveness for certain non-payroll costs.