As this season of PPP loans continues, it feels like the updates will never end. The SBA just released their latest update on August 4th to their FAQs regarding the Paycheck Protection Program.
Wisdom continues to be here for you and your church during this season. We continue to wade through all the information released to let you know what the important updates for your church are. Here are the big takeaways from the August 4th FAQ update your church should be aware of:
Does the borrower have to make any loan payments…?
If fully forgiven? No.
If partially forgiven? Only on the amount not forgiven and any applicable interest
If the forgiveness application is rejected? On the full loan and interest amount.
E signature, E-consent, and copies of signed forgiveness applications and documents are allowed if in compliance with the Electronic Signatures in Global and National Commerce Act.
Besides those two big takeaways, below is a deeper dive for preparing the PPP Loan Forgiveness Application:
Payroll & Nonpayroll costs that were incurred during the covered (alternative covered) period but paid after the covered (alternative covered) period are eligible for loan forgiveness if they are paid on or before the next regular payroll date or billing date after the covered (alternative payroll covered) period.
Payroll & Nonpayroll costs incurred before the covered period but paid during the covered period are also eligible for loan forgiveness.
Payroll costs:
If payroll is paid twice a month or less frequent, the borrower will need to calculate payroll costs for partial pay periods.
Cash compensation should use the gross, rather than the net amount, for eligible payroll costs; cash compensation is limited to annualized $100,000 per employee and should include all forms of cash compensation including bonuses and hazard pay.
Employer, but not employee, costs paid or incurred during the covered period are eligible for payroll costs including:
Group healthcare benefits
Retirement benefits that are not deducted from employees pay or accelerated from periods outside the covered period
Non-Payroll Costs:
Non-payroll costs only apply during the 8-week Covered Period. The 24-week Alternative Payroll Covered Period applies only to payroll costs, not non-payroll costs.
Complete Electricity bills are eligible for loan forgiveness.
Many churches are looking to both put this season of PPP loans behind them quickly once they have spent their funds and to receive full forgiveness. Many want an experienced guide on their side who understands the loan language as they apply for PPP forgiveness. Wisdom can help. Whether you are looking for full preparation help or a pre-bank consultation at a reasonable price, click the link below for a quote:
We are here for you and your church, and we want you to be successful! If you have any concerns outside of the PPP, about stewarding your church finances and financial solutions available to you, please reach out to us here.
If calculating FTE or having to calculate a reduction of forgiveness amount, there are additional updates you should be aware of.
Click here to read the full SBA PPP FAQ update from August 4, 2020.
Our website has an abundance of resources for how churches can navigate the Paycheck Protection Program. Check out our Webinars, Blogs, and Store for more.
