PPP loan forgiveness application published – familiarize yourself with what you need to know to get your PPP loan forgiven. Application instructions are the best guidance so far about applying the criteria and achieving forgiveness. Also, forms confirm businesses want to document employee’s refusal to accept re-hiring and keep other required documentation.

SBA and the Treasury have released the loan forgiveness application for the Paycheck Protection Program loans that many bars, restaurants, breweries, distilleries and wineries took with the expectation that they’d be pursuing the “forgive” option rather than the extended terms with a low interest rate loan option.

You can read the PPP loan forgiveness application form and accompanying instructions here.

The SBA promises that it will be releasing further guidance on forgiveness that will assist borrowers in completing their applications and provide further guidance for lenders regarding their obligations.

As anticipated, payroll, and non-payroll costs for utilities, mortgage obligations, and rent are the associated costs the application worksheet looks to in calculating the loan reduction amount. THe FTE (full time equivalency) reduction quotient from the Schedule A in the form (CARES Act statutory factor in determining eligibility) as well as the 75% to be spent on payroll mandate raised in the prior guidance, but not specifically in the text of the CARES Act are both included on the sheet. The lowest of the numbers in your tally of potential forgiveness amounts gets applied. 

Some Important Notes:

  • From the appendix instructions, the now common guidance given by lenders to businesses regarding employees that do not wish to return to work are applied as expected and bars, restaurants, breweries, distilleries and wineries looking to rehire are admonished to ensure the offer is in writing – if the position was not subsequently filled by a new hire, then you will need to document the issues for the exemption:

FTE Reduction Exceptions: Indicate the FTE of (1) any positions for which the Borrower made a good-faith, written offer to rehire an employee during the Covered Period or the Alternative Payroll Covered Period which was rejected by the employee; and (2) any employees who during the Covered Period or the Alternative Payroll Covered Period (a) were fired for cause, (b) voluntarily resigned, or (c) voluntarily requested and received a reduction of their hours. In all of these cases, include these FTEs on this line only if the position was not filled by a new employee. Any FTE reductions in these cases do not reduce the Borrower’s loan forgiveness.

  • From the appendix the expected Safe Harbor detailed in the first guidance documentation about restoring employee levels by June 30 for those reductions made between February 15 and April 26 is plainly stated:

FTE Reduction Safe Harbor

A safe harbor under applicable law and regulation exempts certain borrowers from the loan forgiveness reduction based on FTE employee levels. Specifically, the Borrower is exempt from the reduction in loan forgiveness based on FTE employees described above if both of the following conditions are met: (1) the Borrower reduced its FTE employee levels in the period beginning February 15, 2020, and ending April 26, 2020; and (2) the Borrower then restored its FTE employee levels by not later than June 30, 2020 to its FTE employee levels in the Borrower’s pay period that included February 15, 2020.

  • There are documentation requirements that are detailed for proving the payroll, FTE and non-payroll expenses AND there is a list of documentation that you are required to keep, but will not be submitting:

PPP Schedule A Worksheet or its equivalent and the following:

  1. Documentation supporting the listing of each individual employee in PPP Schedule A Worksheet Table 1, including the “Salary/Hourly Wage Reduction” calculation, if necessary.
  2. Documentation supporting the listing of each individual employee in PPP Schedule A Worksheet Table 2; specifically, that each listed employee received during any single pay period in 2019 compensation at an annualized rate of more than $100,000.
  3. Documentation regarding any employee job offers and refusals, firings for cause, voluntary resignations, and written requests by any employee for reductions in work schedule.
  4. Documentation supporting the PPP Schedule A Worksheet “FTE Reduction Safe Harbor.”

All records relating to the Borrower’s PPP loan, including documentation submitted with its PPP loan application, documentation supporting the Borrower’s certifications as to the necessity of the loan request and its eligibility for a PPP loan, documentation necessary to support the Borrower’s loan forgiveness application, and documentation demonstrating the Borrower’s material compliance with PPP requirements. The Borrower must retain all such documentation in its files for six years after the date the loan is forgiven or repaid in full, and permit authorized representatives of SBA, including representatives of its Office of Inspector General, to access such files upon request.


Ashley Brandt

Hi there! I’m happy you’re here. My name is Ashley Brandt and I’m an attorney in Chicago representing clients in the Food and Beverage, Advertising, Media, and Real Estate industries. A while back I kept getting calls and questions from industry professionals and attorneys looking for advice and information on a fun and unique area of law that I’m lucky enough to practice in. These calls represented a serious lack of, and need for, some answers, news, and information on the legal aspects of marketing and media. I've got this deep seeded belief that information should be readily available and that the greatest benefit from the information age is open access to knowledge... so ... this blog seemed like the best way to accomplish that. I enjoy being an attorney and it’s given me some amazing opportunities, wonderful experiences, and an appreciation and love for this work. I live in Chicago and work at an exceptional law firm, Goldstein & McClintock, with some truly brilliant people. Feel free to contact me at any time with any issues, comments, concerns… frankly, after reading this far, I hope you take the time to at least let me know what you think about the blog and how I can make it a better resource.

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