SBA issues guidance on forgiveness of PPP loans – Memphis Local, Sports, Business & Food News
Many of the thousands of small businesses that have received a Paycheck Protection Program (PPP) loan of up to $2 million through the Small Business Administration (SBA) are concerned about applying for forgiveness so that the loan and accrued interest can be cancelled.
While the SBA is still setting guidelines for business owners ahead of the scheduled Aug. 10 launch of the forgiveness enforcement platform, it recently released a helpful FAQ to answer and clarify some questions.
The basics and evolutions of PPP loans
PPP funds must be used within eight or 24 weeks for expenses such as rent, utilities, interest on secured loans and, most importantly, payroll, which must be 60% of use. funds.
PPP loan proceeds used for interest payments on unsecured loans, such as lines of credit or credit cards, are not included in the discount guidelines. However, loans for equipment, mortgages and other real estate are eligible for interest forgiveness.
The SBA allows the inclusion of pay periods that overlap the PPP remittance window, Lane Rhodes, financial adviser at Pinnacle Financial Partners, said in an Aug. 5 webinar.