Eight weeks. The clock starts when the loan is funded. These eight weeks are referred to as the “covered period”.

No. The intent of the program is to help businesses make payroll and rent now, not later.

There are many options, but a clean way to do it is to establish a separate PPP account and transfer allowable amounts to your operating account. That way, you can easily generate a report for the use of the funds– which will be required if you apply for forgiveness. When applying for forgiveness, expect to provide calculations for full-time employees (FTEs), payroll tax filings (Form 941 and payroll registers), verification of payment (canceled checks, bank statements), account statements, bills, etc. You can pay a covered expense by credit card and then reimburse that expense. The SBA is clear on this point: no documentation = no forgiveness.

Payroll costs, rent (on leases entered into prior to February 15, 2020). There is no reference to related parties in CARES, so it seems that rent paid to related parties is included. Capital leases are excluded because they are a financing agreement and not a leasing agreement. The principal payments on a mortgage also count. At least 75% of the proceeds must be spent on payroll costs to maximize loan forgiveness.

The definition is exactly the same as it was for the computation of the loan amount. It includes gross wages, cash tips, vacation, parental, family, medical or sick leave,  allowance for separation or dismissal and benefits (but not for the owner) including group health insurance, and retirement. It also includes state and local taxes assessed on wages. Payroll cost does NOT include the employer’s portion of payroll taxes or workers’ compensation premiums.

Not more than $100,000 per year per full time employee.  For example, a company that pays bi-weekly will have wages in excess of $3,846 to any one person in that pay period excluded. Practical tip: If you are on anything other than a weekly pay period, consider switching to weekly so that you maximize the payroll costs incurred within the 8-week covered period.

The intent of the program is for you to be able to keep paying all employees their regular pay, whether they are working or not. If you have laid off employees already, as long as you eliminate the reduction in FTEs and the reduction in wages by June 30, 2020, you may be okay. Consult with your employment law attorney as you consider the terms for rehiring any employees to restore your FTE count.

Payment for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020. A “transportation utility” has been interpreted to mean fuel costs for business vehicles.

Interest on loans secured by real or personal property that were in effect before February 15, 2020 are included. If your line of credit is secured by real or personal property, then the interest paid on the line would be included.

The good news is that up to 100% can be forgiven.  However, it will be reduced as follows:

• To the extent not all of the proceeds are spent on covered payments.
• If your FTE count drops. FTEs are measured and averaged using each pay period during the 8-week period. The average number of FTEs is then compared to a base period. The employer gets to choose the base period that is most beneficial (a) February 15, 2019 – June 30, 2019, or (b) January 1, 2020 – February 29, 2020.

It’s unclear at this time, but the options being suggested are: (a) repay the excess immediately and reduce the loan amount or (b) keep the excess and repay it within the two-year loan period.

The SBA can charge you with fraud in addition to making you repay the misused amounts.

No.

The lender has 60 days to review and either approve or deny the application.

The interest is 1% and the term is two years. No collateral, no personal guarantee required, and no prepayment penalties. No payments are due for six months. However, interest accrues during this deferral period. The actual loan amortization (how principal will be repaid) is not defined.