Gross McGinley LLP

  • About
  • Attorneys
      • Safa Ashrafi
      • Kara M. Beck
      • Michael J. Blum
      • Robert M. Campbell
      • Thomas A. Capehart
      • Victor F. Cavacini
      • Sarah Hart Charette
      • Samuel E. Cohen
      • Adrian K. Cousens
      • J. Jackson Eaton, III
      • Malcolm J. Gross 
      • John F. "Jack" Gross
      • Kimberly G. Krupka
      • Anne K. Manley
      • Paul A. McGinley
      • R. Nicholas Nanovic
      • Constance K. Nelson
      • Kellie L. Rahl-Heffner
      • Patrick J. Reilly
      • Thomas E. Reilly, Jr.
      • Nicholas Sandercock
      • Graig M. Schultz
      • Stuart T. Shmookler
      • Loren L. Speziale
      • Howard S. Stevens
      • Allen I. Tullar
      • Jason A. Ulrich
      • Jennifer L. Weed
      •  
      •  
      • View All Attorneys
      • View All Paralegals
  • Practice Areas
      • Business Law
      • Criminal Defense
      • Divorce and Family Law
      • Elder Law
      • Employment Law
      • Insurance Defense
      • Intellectual Property
      • Internet Law
      • Litigation
      • Medical Malpractice Defense
      • Real Estate
      • Tax Law
      • Wills, Trusts, & Estates
      •  
  • Industries
      • Banking
      • Health Care
      • Media and Publishing
      • Municipal
      • Non-Profit
      •  
  • News
      • Employing Your Business' COVID-19 Vaccination Strategy
        Jan 29th, 2021| Events
      • Gross McGinley Law Firm Donates $13,000 to Greater Lehigh Valley Nonprofits
        Dec 18th, 2020| Firm News
      • Gross McGinley Promotes Sarah Hart Charette and Kellie Rahl-Heffner to Partner Attorneys
        Dec 18th, 2020| Attorney News
  • Blog
      • Pet Custody - PA Laws May Change
        Feb 19th, 2021
      • Prenuptial Agreements in PA
        Feb 12th, 2021
      • Why Your PA Business Needs to File its Decennial Report
        Feb 9th, 2021
  • Careers
  • 610.820.5450
  • Contact Us
  • Make a Payment

Following CDC and state guidance, we are offering in-person and remote legal services to our clients. Please call us at 610.820.5450 for assistance with your legal needs or visit our COVID-19 page for insights on pandemic-related matters.

gross-headerimg-2
Gross McGinley LLP > Blog > Top Ten Things to Know from the PPP Loan Forgiveness…
Blog Disclaimer

Blog Disclaimer

This Blog is intended for educational and informational purposes and intended to only provide you with a general understanding of the law, not to provide any legal advice, including on the subject of the Blog. Laws that may pertain to this Blog will vary by jurisdiction, and the information on this blog may not apply to you. The content within this Blog is not intended, and should not be construed, in any way to be legal advice and thus you should not rely on any information provided in the Blog as legal advice. You should consult with appropriate legal counsel concerning any issues for which legal advice may be needed. Your review or use of the Blog and the content therein is not intended to create, and does not constitute, an attorney-client relationship. Please contact us if you have any questions about a Blog or would like more information, but, by contacting us, no attorney-client relationship is formed between you and Gross McGinley, LLP, including the Blog author. Do not send any confidential information to Gross McGinley, LLP or the authors of the Blog without first speaking to one of our lawyers and receiving our permission to provide confidential information. Unsolicited confidential information sent to us may not be subject to an attorney-client privilege and may not be treated as confidential. This Blog is not published for advertising or solicitation purposes. Gross McGinley, LLP disclaims all liability to all persons for any claim, loss, liability or any damages that may arise in connection with the Blog and any content or information contained in the Blog. Even though we strive to create our Blog content based on our current understanding of the law, we cannot and do not guarantee that the content and information in the Blog is current, accurate, or complete. Gross McGinley, LLP owns the copyright in the Blog, which is protected by federal and state laws, including copyright laws. The Blog cannot be altered or modified in any way. A copy of the Blog may be used and printed only for personal, educational, informational and noncommercial purposes. The Blog cannot be used for any other purpose without the express permission of Gross McGinley, LLP.

Top Ten Things to Know from the PPP Loan Forgiveness Application

Written by: Loren L. Speziale on May 18, 2020 | Category: Blog | Tags: Banking, Business Law, COVID-19, Employment Law

    Share

  • Facebook
  • Twitter
  • Google Plus
  • LinkedIn

After weeks of speculation and discussion, the SBA has released the Paycheck Protection Program (PPP) Loan Forgiveness Application on May 15, 2020. This eleven page document provides instructions for loan forgiveness calculations along with calculation forms and worksheets. The following ten questions were answered and clarified in the PPP Loan Forgiveness Application:

  1. Do costs need to be both incurred in and paid in the Covered Period?  Only payroll costs need to be both incurred in and paid in the Covered Period.  Notably, for payroll costs only, SBA offers borrowers who use a bi-weekly or more frequent payroll schedule the option to use an alternative covered period that commences on the first day of the first pay period following the loan disbursement date. Non-payroll costs need to be paid or incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period.
  2. How much cash compensation is eligible for forgiveness?  An amount not to exceed $15,385 (e.g. an annual salary of $100,000 prorated for Covered Period (or Alternative Covered Period)) for each employee.  This applies to amounts for owners as well.
  3. What is an FTE?  A full time equivalent (FTE) employee is determined by either calculating the average number of hours paid per week divided by 40, rounded to the nearest tenth and capped at 1.0 or using 1.0 for employees who work 40 hours or more per week and .5 for employees who work fewer hours.
  4. What are the Safe Harbor Rules for FTE Reductions? Borrower is exempt from the FTE Reduction if the Safe Harbor applies.  The Safe Harbor is triggered, as to FTE Reductions, if Borrower reduced its FTE levels in the period beginning February 15, 2020 and ending April 26, 2020 and Borrower then restored its FTE employee levels by not later than June 30, 2020 to its FTE levels in Borrower’s pay period that included February 15, 2020.
  5. What are the Safe Harbor Rules for Salary/Hourly Wage Reductions?  Borrower is exempt from the Salary/Hourly Wage Reduction if the Safe Harbor applies.  The Safe Harbor is triggered, as to Salary/Hourly Wage Reductions, if Borrower reduced the average annual salary or hourly wages of an employee by more than 25% in the period beginning February 15, 2020, and ending April 26, 2020; and Borrower then restored the average annual salary or hourly wage of that employee by not later than June 30, 2020 to that employee’s average annual salary or hourly wage as of February 15, 2020.
  6. When will the amount eligible for forgiveness be reduced based upon FTE reductions?  A reduction may occur if Borrower’s average weekly FTE during the Covered Period (or Alternative Covered Period) is less than Borrower’s average weekly FTE during the reference period selected by Borrower.  The reference period is either February 15, 2019 and June 30, 2019 or January 1, 2020 and February 29, 2020; or in the case of a seasonal employer, the aforementioned periods or any consecutive twelve week period between May 1, 2019 and September 15, 2019.
  7. When will the amount eligible for forgiveness be reduced based upon salary/hourly wage reductions? A reduction may occur if the average annual salary or hourly wages of certain employees during Covered Period (or Alternative Covered Period) is less than the average annual salary or hourly wages of the same employees during the period from January 1, 2020 to March 31, 2020.
  8. What happens if an employee refuses to return to work, is fired for cause or resigns?  The loan will not be reduced due to a FTE reduction during the Covered Period (or Alternative Covered Period) resulting from any position where Borrower made a good-faith, written offer to rehire an employee which was rejected by employee or any employee who was fired for cause, voluntarily resigned; or voluntarily requested and received a reduction of their hours.
  9. What will the lender require to be submitted to consider a loan forgiveness request? A Borrower must submit the PPP Loan Forgiveness Calculation Form and PPP Schedule A along with documentation, verifying eligible cash compensation and non-cash benefit payments from the Covered Period (or Alternative Covered Period), showing the average number of FTE employees on payroll for the periods used in reduction calculations, and verifying existence of then non-payroll obligation/service prior to February 15, 2020 and eligible payments from Covered Period.
  10. Do Borrowers need to maintain these records relating to the PPP Loan?  There is a documentation retention requirement of 6 years after the date the PPP Loan is forgiven or repaid in full and these documents will be subject to review by SBA.

Based upon a press release from the U.S. Department of the Treasury on May 15, 2020, the SBA will also be issuing regulations and guidance in the near future to further assist Borrowers and Lenders.

Please reach out to our Business Services Group with questions regarding the PPP Loan Forgiveness Application.

Attorney Loren Speziale collaborates with business owners and human resource professionals, providing legal guidance for a wide variety of operational and personnel matters. 

News/Blog Archives

  • 2021
    • February 2021 (3)
    • January 2021 (6)
  • 2020 • 2019 • 2018 • 2017 • 2016 • 2015 2014 • 2013 • 2012 • 2011 • 2010 • 2009 • 2008 2007 • 2006 • 2005 • 2004 • 2003 • 2000

Popular Tags

  • Community Involvement (221)
  • Litigation (128)
  • Employment Law (104)
  • Estate Planning & Administration (77)
  • Business Law (76)
  • COVID-19 (59)
  • Intellectual Property (52)
Litigation

Spotlight: Litigation

Gross McGinley’s skilled litigation team vigorously pursues clients’ interests, either by asserting claims or defending them. Our litigation attorneys represent individuals and businesses in state and feder… Read More

Sign up for Legal Updates

  • This field is for validation purposes and should be left unchanged.
  • Meet the Attorneys
  • Practice Areas
  • News & Blog
Next Previous
  • Malcolm J. Gross  view profile

  • Howard S. Stevens view profile

  • Stuart T. Shmookler view profile

11 View All Attorneys
  • Insurance Defense

    Insurance Defense

    more info
  • Divorce and Family Law

    Divorce and Family Law

    more info
  • Wills, Trusts, & Estates

    Wills, Trusts, & Estates

    more info
5 View All Practice Areas
  • Pet Custody – PA Laws May Change

    Pet Custody - PA Laws May Change

    continue reading
  • Prenuptial Agreements in PA

    Prenuptial Agreements in PA

    continue reading
  • Why Your PA Business Needs to File its Decennial Report

    Why Your PA Business Needs to File its Decenn…

    continue reading
337 View Blog
  • Instagram
  • LinkedIn
  • Facebook
  • Twitter
  • YouTube
Super Lawyers Million Dollar Advocates NBLSC Board Certified Lawyers
Our Locations: Allentown • Easton • Lehighton
  • Allentown 33 S. Seventh Street, P.O. Box 4060
    Allentown, PA 18105-4060
    Telephone: (610) 820-5450
    Fax: (610) 820-6006
  • Easton 101 Larry Holmes Drive, Suite 202
    Easton, PA 18042
    Telephone: (610) 258-1506
    Fax: (610) 820-6006
  • Lehighton 415 Mahoning St.
    Suite A
    Lehighton, PA 18235
    Telephone: (610) 820-5450
    Fax: (610) 820-6006

Copyright © 2021 Gross McGinley LLP. All rights reserved. | Privacy Policy and Terms of Use Secure File Portal