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PPP Loan-Important Information

Updated: Jan 23, 2021

How to Jumpstart Your PPP Loan Forgiveness Process.

On December 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021 into law. In the bill are guidelines for a second round of the Paycheck Protection Program.

You may have received funding from the Paycheck Protection Program (PPP). While the funding is technically called a loan, 100% of the loan can be forgiven if you follow the PPP loan forgiveness rules.

We understand that It can be difficult for small businesses to navigate the ins and outs of how to achieve total Paycheck Protection Program forgiveness. The good news is this new bill aims to make the application process easier.

We have put together a brief summary of the PPP forgiveness terms. The amount of funding you either already received or are waiting to receive has to be equal to 2.5 times your average monthly payroll cost for 2019 or $10 million, whichever is lower.

Here are a list of things the funding you get from the loan can be used for:

  • Payroll: Payroll costs include wages, salaries, PTO, and health benefits.

  • Mortgage interest: You can use the funds to pay for mortgage interest as long as you signed your mortgage before Feb. 15, 2020.

  • Rent: As long as you signed your lease before Feb. 15, 2020, you can pay rent with the loan.

  • Utilities: If your services began before Feb. 15, 2020, you can also pay utilities with the funding. When we say utilities that includes electricity, gas, water, transportation, phone

If you can show that you used your PPP loan for one of the spending buckets mentioned above, that money becomes eligible for forgiveness.

Whose eligible for PPP forgiveness?

With the new bill comes a new rule stating that if you received a loan of $50,000 or less, you will be eligible for full forgiveness, even if you reduced your FTE (full-time equivalent) employee count or reduced employee wages or salaries.

Eligible expenses coverage period

When you apply for your loan, you can choose a term of 8-24 week coverage period.

Your coverage period starts the day you received your first loan payment—not necessarily the day you signed your loan agreement. Don’t worry about adjusting your payroll schedule to fit this window. Any payroll incurred during the coverage period is an eligible expense.


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