The Small Business Administration (SBA), in consultation with the Treasury Department, recently released a new loan forgiveness application for Paycheck Protection Program (PPP) loans of $50,000 or less (press release; application; instructions).
PPP borrowers can seek loan forgiveness for payroll costs incurred during the covered period, including cash compensation, employee benefits, and owner compensation. Borrowers can also seek loan forgiveness for nonpayroll costs, such as mortgage and rent obligations and utility payments. However, eligible nonpayroll costs cannot exceed 40 percent of the total forgiveness amount. The covered period is the 24-week period beginning on the PPP Loan Disbursement Date, or eight-week period if the borrower received the loan before June 5, 2020.
Notably, the PPP closed on August 8, 2020, and SBA is no longer accepting applications. Additional guidance on PPP is available in the FAQs.