SBA Publishes New FAQs on Paycheck Protection Program Forgiveness Issues

On August 4^th, the Small Business Administration published new FAQs on Paycheck Protection Program forgiveness issues for borrowers. The FAQs provide key insights on potentially eligible payroll and non-payroll costs and on potential reductions to forgivable expenses. 

The guidance provides helpful examples related to calculating forgiveness.  Among other things, the FAQs clarify that reductions in pay outside of salary or wages (e.g., commissions) do not result in pay-level reductions under the statute and do not affect overall forgiveness of the loan. 

This latest set of FAQs supplements an SBA notice outlining the process by which PPP lenders must review loan forgiveness applications, noting that lenders may begin submitting loan forgiveness decisions to SBA on August 10. Dealerships with PPP loans should review both the FAQs and the SBA notice with their lenders and, as necessary, with outside advisors such as CPAs and attorneys. 

Note: Additional PPP loan forgiveness information is available from NADA’s Coronavirus Hub, including Guidance on the Use and Forgiveness of PPP Loan Proceeds, a recent webinar, and CARES Act FAQs.