The Treasury and Small Business Administration (SBA) released two new Interim Final Rules (IFR) – one on Loan Review Procedures and one covering Loan Forgiveness.
The first one on loan review procedures and related borrower and lender responsibilities contains primarily new, important information related to the forgiveness process, lender’s responsibilities when reviewing forgiveness applications, and SBA’s authority to review loans.
IFR on Loan Review Procedures and Related Borrower and Lender Responsibilities
The second interim final rule on forgiveness contains some new information as well as finalizes in a rule form much of the information found in the new forgiveness application and prior Treasury FAQs that were previously issued – click here for article related to the application and FAQs.
One new helpful FAQ is related to whether bonus pay or hazard pay during the 8-week covered period may be included in the definition of “payroll costs.” The interim final rule clarifies that the payment of bonuses and hazard pay to employees are eligible for loan forgiveness. Total compensation, including bonuses and hazard pay, cannot exceed $15,385 per employee. The use of bonuses may be an excellent way for business owners to meet the PPP payroll requirements, while also recognizing those employees who worked through, and continue to work through, very challenging circumstances.
Additionally, Congress is considering legislation that will give small businesses more flexibility in spending their PPP loans. We will keep you informed of all new developments. Please continue to check the visit the R+R COVID-19 Resource Center section of our website for updates.
Remember – any amount that is not forgiven must be re-paid. If you need assistance completing your PPP loan forgiveness application and calculating your loan forgiveness amount, please contact John Priola.
REYNOLDS & ROWELLA | ACCOUNTING AND CONSULTING
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The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, give us a call at 203.438.0161 or email us.
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