More answers on PPP loan forgiveness

The SBA published a new set of Frequently Asked Questions yesterday regarding PPP loan forgiveness:

  • A borrower has 10 months from the end of the Covered Period (8 or 24 weeks) to submit their loan forgiveness application, and they are not required to make any payments until the forgiveness amount from that application is remitted to the lender by the SBA.
  • Interest accrues during the time between the disbursement of the loan and SBA remittance of the forgiveness amount. The borrower is responsible for paying the accrued interest on any amount of the loan that is not forgiven.
  • Both payroll and non-payroll costs that were incurred prior to the covered period, but paid during the covered period, qualify for forgiveness.
  • Payroll costs include all forms of cash compensation paid to employees, including tips, commissions, bonuses, and hazard pay. However, there is still no clarification as to caps on these amounts, other than the $100,000 on an annualized basis.
  • Forgiveness does not apply to retirement or health care benefits “accelerated” into the covered period. Only the amount of benefits proportional to the covered period qualify for forgiveness.
  • If a lease that existed prior to February 15, 2020, expires on or after February 15, 2020, and is renewed, the lease payments made pursuant to the renewed lease during the Covered Period are eligible for loan forgiveness.
  • If a loan on real or personal property that existed prior to February 15, 2020, is refinanced on or after February 15, 2020, the interest payments on the refinanced loan during the Covered Period are eligible for loan forgiveness.
  • Interest on unsecured credit is not eligible for loan forgiveness because the loan is not secured by real or personal property.
  • Utility expenses for the “distribution of transportation” refers to transportation utility fees assessed by state and local governments. Payment of these fees by the borrower is eligible for loan forgiveness. For more information on these fees, go to
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