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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z. In submitting a PPP loan application, FAQ 31 provides that you are required to certify in good faith that “current economic uncertainty makes the loan necessary to support your ongoing business operations.” In determining if you are eligible for a PPP loan, you need to take into account your current economic business activity. Congress created the PPP as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. The SBA has forgiven about 1.7 million of those so … Simple forgiveness for PPP loans under $150,000 Revisions to PPP in the December 2020 coronavirus relief bill require that any business that had a loan worth less than $150,000 can fill out a simplified one-page application. Các đơn đăng ký phải được nộp bằng tiếng Anh. Extended Coverage; Deadline for Forgiveness Application: The PPP2 Act and the rules specify that the “loan forgiveness covered period” is the period beginning on the ‎date the lender disburses the PPP loan and ending on any date selected by the borrower that occurs during the period (i) beginning on the date that is 8 weeks after the date of disbursement and (ii) ending on the date that is 24 weeks after the date of disbursement. You can also select PPP loan forgiveness covering a period of either 8 weeks after the loan’s origination date or 24 weeks after the loan’s origination date regardless of when the loan was disbursed. This quick guide walks you through the process of adding the Journal of Accountancy as a favorite news source in the News app from Apple. To apply for loan forgiveness: 1. 116-136, which was signed into law March 27. Some are essential to make our site work; others help us improve the user experience. Fears of a late-October PPP surprise came to the SBA’s attention because the program’s loan forgiveness application forms (3508, 3508EZ, and 3508S) display an expiration date of “10/31/2020” in the upper-right corner. The most significant are: While the above guidance may provide some clarity, the SBA has not spelled out many details surrounding the PPP. “The announcement by the Administration of a simplified process of loan forgiveness for small businesses who accessed $50,000 and less in PPP loans is an incredibly welcome sign,” said NASE president and CEO Keith Hall in a statement Friday. The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus. Since their issuance, FAQs 31 and 39 have created more frustration and confusion than they have provided answers. How to start the PPP loan appeal process The period covered by a PPP loan extends from August 8, 2020, to March 31, 2021. The Paycheck Protection Flexibility Act of 2020, P.L. Because the first PPP loans were awarded in April, some PPP borrowers had recently received notices from lenders that payments on their PPP loans were due. Since our last eAlert, the SBA has continued to issue additional guidance relating to the new eligibility test. 116-142,  extended the deferral period for loan payments to either (1) the date that SBA remits the borrower’s loan forgiveness amount to the lender or (2) if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period. A business that was in operation on February 15, 2020 will continue to remain eligible for PPP loan funding, irrespective of any change in ownership after that date. For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news. For example, what does “ability to access other source of liquidity” mean? 47 that it is automatically extending the deadline to … While FAQ 31 appears to refer only to public companies, the language of the answer applies to all borrowers. The new guidance, found in question No. Here’s why. If borrowers do not apply for forgiveness within 10 months after the … The result is a new, simple two-page form called “PPP Loan Forgiveness Application Form 3508S.” The second page is a voluntary demographic information form, so the application is essentially just one page. Tất cả các tài liệu dưới đây chỉ phục vụ mục đích cung cấp thông tin. Until further guidance is issued, borrowers are faced with a very difficult choice – do they keep the PPP funds and risk that the SBA may later hold the unclear guidance against them, or do they return the funds and accept the resulting negative impacts, including lay-offs and/or possible permanent business closure? Worldwide leaders in public and management accounting. In general, the lender has 60 days from receipt of a complete loan forgiveness application to issue a decision to the SBA, and the SBA, subject to its review, will remit funds within 90 days after the lender issues its decision to the SBA. Earlier this week, the Small Business Administration (“SBA”) issued Frequently Asked Question (“FAQ”) 43. Recklessly disregarding them can bring scrutiny from various agencies and trigger a criminal investigation. Possibility of getting a PPP loan for the second time. Select to receive all alerts or just ones for the topic(s) that interest you most. Liberty SBF anticipated changes to the loan forgiveness process, and as expected, the new stimulus legislation shifted the PPP loan forgiveness process in the borrower’s favor. More than 87 percent of all PPP loans were for $150,000 or less, while two thirds were for $50,000 or less, according to SBA data. Late on May 5, 2020, the SBA issued FAQ 43 extending the safe harbor deadline to return PPP loan funds from May 7, 2020 to May 14, 2020. This is … With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession. The SBA published an Interim Final Rule authorizing a new streamlined process for forgiveness of loans of $50,000 or less. 52 in the SBA’s frequently asked questions document for the PPP, clarifies that the deferral period extension automatically applies to all loans, with no requirement from the SBA of a formal modification of the promissory note. The SBA published the new FAQ item a day after issuing a letter stating that it has begun remitting PPP loan forgiveness payments to lenders – in other words officially forgiving some of the 5.2 million loans, totaling $525 billion, granted under the program. FAQs About PPP Loan Forgiveness. This article is not intended to be an exhaustive summary of the PPP or the information contained in the Interim Final Rules or FAQs. Businesses that accepted a Paycheck Protection Program (“PPP”) loan are on the clock. 3. We use cookies on this website to improve functionality, enhance performance, analyze website traffic and to enable social media features. And while the Flexibility Act extended the deferral period, it did not specify whether lenders and borrowers had to modify promissory notes used for PPP loans to reflect the extended deferral period. With Workiva, we've created a PowerPoint deck that helps you create your own scorecards -- quick reference reports used across organizations to update stakeholders on the performance of defined deliverables. 46 and 47. 4. To comment on this article or to suggest an idea for another article, contact him at Jeff.Drew@aicpa-cima.com. You have 30 calendar days after receiving the final SBA loan review decision or a notification of the decision from your lender (whichever is earlier). For businesses that are part of a single corporate group, the maximum aggregate PPP loans that the group can receive is capped at $20 million. In the meantime, if you applied for a PPP loan but now wonder if you made the right decision, here are a couple of things to do today to reduce the chance of becoming the target of an expensive federal investigation later down the road: In addition to FAQs 31, 39 and 43, since our last eAlert, the SBA has continued to issue additional guidance generally with respect to PPP loans. Under the safe harbor, if you applied for a PPP loan prior to April 24, 2020 and repay the loan in full by May 7, 2020, you will be deemed by the SBA to have made the required certification in good faith. The House-passed measure heads to President Biden for a signature. On Friday, May 15th, the Small Business Administration (SBA) released the application borrowers of a Paycheck Protection Program (PPP) loan must use to determine the amount of the loan … We have good news: Halloween won’t be as scary as originally thought for the millions of small businesses that took out Paycheck Protection Program (PPP) loans of $50,000 or less. Be the first to know when the JofA publishes breaking news about tax, financial reporting, auditing, or other topics. Go to the AICPA Town Hall Series webpage for more information and to register. The issue came into sharper focus when the SBA released the streamlined PPP Loan Forgiveness Application Form 3508S in October with that very same expiration date (see related post). FORGIVENESS APPLICATION: If you have exhausted your third round of PPP funds, please contact your ANB loan officer, or Sydney Gnad at 806-378-8155, to start the forgiveness process. — Jeff Drew is a JofA senior editor. Late on May 5, 2020, the SBA issued FAQ 43 extending the safe harbor deadline to return PPP loan funds from May 7, 2020 to May 14, 2020. Student workers generally count as employees unless the applicant is a higher education institution and the student worker’s services are performed as part of a Federal Work-Study Program (. Borrowers can apply for forgiveness any time up to the maturity date of the loan. The 60-day extension will allow applicants an additional two months to apply for a first or second draw PPP loan. Question: The PPP loan forgiveness application forms (3508, 3508EZ, and 3508S) display an expiration date of 10/31/2020 in the upper-right corner. In this latest FAQ, the SBA extended the safe harbor deadline to return PPP loan funds from May 7, 2020 to May 14, 2020. © Association of International Certified Professional Accountants. With the expansion of SBA’s safe harbor regarding the economic necessity of PPP loans, the SBA also announced in FAQ No. We can only hope that the SBA will issue additional guidance to confirm the parameters under which businesses can in good faith certify the need for a PPP loan. This site uses cookies to store information on your computer. It’s recommended you apply for forgiveness before you need to make your first PPP loan payment. AICPA experts discuss the latest on the PPP and other small business aid programs during a biweekly virtual town hall. Yes, there is a deadline for submitting your appeal to the OHA. If you have previously received a Paycheck Protection Program (PPP) loan, certain businesses are eligible for a Second Draw PPP loan. A borrower’s PPP loan forgiveness amount will not be reduced if the borrower laid off an employee and then makes a written offer in good faith to rehire the employee but the employee rejects the offer (FAQ 40). For purposes of determining PPP loan eligibility under the 500-employee threshold established under the CARES Act: An applicant must calculate the total number of employees, including part-time employees; this is compared to loan forgiveness, i.e., for purposes of determining whether the loan forgiveness amount will be reduced in the event of a reduction in headcount; a borrower must look at their number of full-time equivalent employees (FAQ 36). For example, what does “ability to access other source of liquidity” mean? The lender will notify the borrower of the loan forgiveness amount. The Paycheck Protection Platform allows lenders to submit PPP loan requests and their forgiveness decisions to the SBA. The Deadline for This SBA Loan Program Is Fast Approaching ... the U.S. Small Business Administration ... PPP Loan Forgiveness: 5 Important Questions … Read our privacy policy to learn more. On April 29, 2020, the SBA issued FAQ 39 in which the SBA determined that it “will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender’s submission of the borrower’s loan forgiveness application.” The SBA stated that it will be issuing additional guidance implementing this review procedure. The program stopped accepting applications on Aug. 8 with almost $134 billion of congressionally approved funds remaining unspent. The Nossaman CARES Act team will continue to provide further updates if and when further guidance is issued. A 60-day deadline extension will give SBA the necessary runway to address technical challenges, produce needed guidance, and work with program stakeholders to ensure as many eligible businesses that need to apply for a loan can enter the program.” The AICPA gave several examples of CPAs who were helping clients with their PPP loans. By using the site, you consent to the placement of these cookies. However, the amount of loan forgiveness will be reduced if certain employment and compensation levels are not maintained or if less than 60% of the funds are spent on payroll over a loan forgiveness period of either eight weeks or 24 weeks. The Small Business Administration (SBA) is still working to finalize the rules and approved forms for the updated Paycheck Protection Program Loan Forgiveness process. The guidance means that lenders must immediately comply with the extended deferral period and notify borrowers of the change. The US Small Business Administration released guidance Wednesday clarifying that lenders must recognize the previously established extended deferral period for payments on the principal, interest, and fees on all Paycheck Protection Program (PPP) loans, even if the executed promissory note indicates only a six-month deferral. (The full text of these FAQs appear below.) Take time. The Paycheck Protection Flexibility Act of 2020, P.L. Loans issued after June 5, 2020, have a maturity of five years. 116-142, extended the deferral period for loan payments to either (1) the date that SBA remits the borrower’s loan forgiveness amount to the lender or (2) if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period. Question: The PPP loan forgiveness application forms (3508, 3508EZ, and 3508S) display an expiration date of 10/31/2020 in the upper-right corner. The legislation authorized Treasury to use the SBA’s 7(a) small business lending program to fund loans of up to $10 million per borrower that qualifying businesses could spend to cover payroll, mortgage interest, rent, and utilities. On April 28, 2020, the SBA issued FAQ 37 confirming that the new eligibility test also applies to private companies. Do you need to use up your line of credit and/or seek bridge loans and/or ask for additional equity investment first? If the loan is only partially forgiven or not forgiven at all, the loan must be paid off in full before its maturity date. FAQ Nos. On May 13, 2020, SBA issued new guidance with respect to a borrower’s good faith certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant,” as well as extending the safe harbor deadline for repaying PPP loans to May 18, 2020. Readers are encouraged to click on the links above and visit the SBA’s website for more complete and up-to-date information regarding the PPP. The eight-week covered period commences on the date the PPP loan is disbursed, with disbursements to be made in one single lump sum within 10 calendar days of loan approval, i.e., when the loan is assigned a loan number by the SBA (. Borrowers may be eligible for PPP loan forgiveness.. 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