The Small Business Administration (SBA) recently issued a series of Frequently Asked Questions (FAQs) on the Paycheck Protection Program (PPP) which was passed as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
FAQs Address Issues of Concern for Borrowers and Lenders
According to the document:
Borrowers and lenders may rely on the guidance provided in this document as SBA’s interpretation of the CARES Act and of the Paycheck Protection Program Interim Final Rule (“PPP Interim Final Rule”). The U.S. government will not challenge lender PPP actions that conform to this guidance, and to the PPP Interim Final Rule and any subsequent rulemaking in effect at the time.
Clarification Is Provided in Key Areas
Among the questions answered in this series of FAQs are the following:
- Does the PPP Interim Final Rule require the lender to replicate every borrower’s calculations?
- Are small business concerns required to have 500 or fewer employees to be eligible borrowers in the PPP?
- Does that exclusion of compensation in excess of $100,000 annually apply to all employee benefits of monetary value?
- Do PPP loans cover paid sick leave?
- Should payments that an eligible borrower made to an independent contractor or sole proprietor be included in calculations of the eligible borrower’s payroll costs?
- How should a borrower account for federal taxes when determining its payroll costs for purposes of the maximum loan amount, allowable uses of a PPP loan, and the amount of a loan that may be forgiven?
Contact Your Attorney for Further Information
If you have further questions after reviewing the FAQs, Vision Payroll recommends that you contact your attorney and your lending institution,