Paycheck Protection Program Updates and Forgiveness

The Paycheck Protection Program has ended.

Please note in order to maximize forgiveness, you must spend a minimum of 60% of the total of the loan on eligible payroll expenses (or owner-compensation replacement, subject to caps).

If you are looking for help applying for loan forgiveness, CTSBDC has a team of advisors ready to help. Request advising today to get started.

We also have recorded webinars to help you apply for forgiveness based on your loan amount, a blog on Forgiveness Tips, as well as a Fact Sheet on Loan Forgiveness, available under the 'How Can I Get the Loan Forgiven' tab below.

WHAT CAN I USE THE MONEY FOR?

Once you calculate the amount your are eligible for, you have a period of 8-24 weeks at your choosing, called your "Covered Period." You must use the funds received starting day one on allowable payroll and non-payroll expenses.

PAYROLL COSTS

Compensation to employees in the form of:

  • salary, wages, commissions, or similar
  • cash tips or the equivalent
  • payment for vacation, parental, family, medical, or sick leave (except FFCRA)
  • allowance for separation or dismissal
  • payment for employee benefits including group health care or group life, disability, vision, or dental insurance, including insurance premiums, and retirement
  • SUTA

For an independent contractor or sole proprietor: wages, commissions, income, or net earnings from self-employment, or similar

NON-PAYROLL COSTS

  • mortgage interest payments (but not mortgage prepayments or principal payments)
  • rent payments
  • utility payments
  • interest payments on any other debt obligations that were incurred before February 15, 2020 (allowable use but not forgivable)
  • refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020 (allowable use but not forgivable)
  • covered operations expenditures
  • covered property damage costs (if applicable)
  • covered supplier costs
  • covered worker protection expenditures

HOW CAN I GET THE LOAN FORGIVEN?

Overall the forgiveness process remains the same as before. We will provide additional guidelines as the SBA releases additional documentation.

Be sure to use the funds only towards allowed, forgivable expenses, as detailed above.

Important Highlights

60/40 Rule Remains: At least 60% still has to be used for allowable payroll costs

Covered Period: Allows borrowers to select their loan forgiveness covered period starting on the day of disbursement of the funds, and choosing a time period between 8 and 24 weeks.

Simplified Forgiveness for Loans Under $150k: There are now three different application forms and processes based on your loan amount, and whether you were able to comply with the requirements of the program regarding number of employees & wages.

A simplified forgiveness process allows those with loans under $50,000 to be exempt from forgiveness reductions based on FTE (full-time equivalent) or salary/wage reductions.

In addition, those with loans under $150,000 may also use a simplified forgiveness application as long as they did not eliminate FTEs nor reduce salaries/wages beyond 25%.

EIDL Advances: No longer have to be subtracted from PPP forgiveness.

 

Please contact a CTSBDC advisor if you need help with PPP Forgiveness.

Download Fact Sheet