The deadline to file a PPP loan application was August 8, 2020. (Source: P.L. 116-147, July 5, 2020).

Your bank must make the first disbursement of the loan within ten calendar days from the date of loan approval. (Source: SBA FAQs dated as of June 25, 2020, Footnote 5).

PPP loans that receive an SBA loan number on or after June 5, 2020 have a term of five years. If a PPP loan received an SBA loan number before June 5, 2020, the loan has a two-year maturity, unless the borrower and lender mutually agree to extend the term of the loan to five years. (Source: SBA FAQs dated as of June 25, 2020, Question 49).

The length of payment deferral depends on whether the borrower applies for loan forgiveness. If the borrower applies for loan forgiveness, payments of interest, principal, and fees on PPP loans are deferred until the amount approved for forgiveness, if any, is remitted by the SBA to the lender. If the borrower has not applied for forgiveness by the date that is 10 months after the end of the covered loan, payment deferral will end on that date.  For example, if a business received a PPP loan disbursed on June 25, 2020, the 24-week covered period would end on December 10, 2020. If the business does not submit a loan forgiveness application to its lender by October 10, 2021, it must begin making payments as of October 10, 2021. (Source:  SBA FAQs on PPP Loan Forgiveness dated as of August 4, 2020).

The covered period is the timeframe used to calculate PPP loan forgiveness. PPP funds spent on costs incurred after the covered period ends are not eligible for forgiveness. The covered period for a PPP loan is generally either (1) the 24-week (168-day) period beginning on the PPP loan disbursement date, or (2) if the borrower received its PPP loan before June 5, 2020, the borrower may elect to use an eight-week (56-day) covered period beginning on the PPP loan disbursement date. Covered periods cannot extend beyond December 31, 2020. Thus, borrowers that received PPP disbursements after July 15 will not be able to use the full 24-week covered period. (Source:  SBA FAQs on PPP Loan Forgiveness dated as of August 4, 2020).

The covered period for the loan forgiveness calculation begins on the date the lender makes the first disbursement of the PPP loan to the business but if you have a biweekly (or more frequent) payroll cycle, you may choose to have the period start on the first day of the first payroll period after the loan disbursement date. (PPP Loan Forgiveness Application Instructions, June 16, 2020.)

Yes. At least 60% of the total loan proceeds must be used for eligible payroll costs in order to be eligible for full loan forgiveness. In addition, at least 60% of the loan forgiveness amount (which may be lower than the total loan proceeds) must be used for eligible payroll costs. The threshold was originally set at 75% in the CARES Act and was reduced to 60% by the Paycheck Protection Program Flexibility Act.

Although the business used less than 60% of the total loan proceeds for payroll costs, partial loan forgiveness is available. Based on current interpretations of the loan forgiveness program, the estimated loan forgiveness amount would be $85,000, not zero, calculated as follows. Because $15,000 was used for non-eligible costs, the potential loan forgiveness amount would be capped at $85,000. The $55,000 used for payroll costs is 64.7% of $85,000. Therefore, since more than 60% of the forgivable amount of the PPP loan was used for payroll, the estimated loan forgiveness amount would be $85,000. (Source: SBA FAQs on PPP Loan Forgiveness dated as of August 4, 2020).

Unless an exception or safe harbor applies, the loan forgiveness amount is subject to reduction as a result of decreases in FTE employees, salaries, or wages.  (PPP Loan Forgiveness Application Instructions, June 16, 2020).

In calculating loan forgiveness, the borrower can exclude a reduction in FTE employees for (1) any positions for which the borrower made a good-faith, written offer to rehire an individual who was an employee on February 15, 2020, and the borrower was unable to hire similarly qualified employees for unfilled positions by December 31, 2020; and (2) any positions for which the borrower made a good-faith, written offer to restore any reduction in hours, at the same salary or wages, during the covered period and the employee rejected the offer, and (3) any employees who were fired for cause, voluntarily resigned, or voluntarily requested and received a reduction of their hours and for which the position was not filled by a new employee. (PPP Loan Forgiveness Application Instructions, June 16, 2020).

The borrower is exempt from the FTE-based reduction in loan forgiveness if it can, in good faith, document that it was unable to operate between February 15, 2020, and the end of the covered period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19. (PPP Loan Forgiveness Application Instructions, June 16, 2020).

A borrower is exempt from the FTE-based reduction in loan forgiveness if it reduced its FTE employee levels during the period beginning February 15, 2020, and ending April 26, 2020, provided the borrower restored its FTE employee levels by December 31, 2020 to the levels in the pay period that included February 15, 2020. (PPP Loan Forgiveness Application Instructions, June 16, 2020).