Page 29 - Bulletin Vol 25 No 2 - May-Aug 2020 - 9-2-20.pub

Article | Legal

Preparing for Paycheck Protection Program

Forgiveness

By Jennifer Kirschenbaum, Esq.

Kirschenbaum & Kirschenbaum, P.C.

Sometime in the spring of 2020 you likely applied for and received stimulus money under
the Paycheck Protection Program. You have also, likely, expended the funds received by

now and you may be wondering how you start the forgiveness process. We have some
answers, and we do not have others. The answers we do have are an idea of what
questions will be asked and parameters followed by most institutional lenders, however,
many institutional lenders have not started taking applications or disclosing what their
process will be. If that is the case, how do we have answers? We do have available the
SBA forgiveness application*, which is online and available which will serve for most
institutional lenders (if not all) as the template for the information required to process a
forgiveness application.

The SBA forgiveness application requires specific disclosures around payroll costs and
payroll schedule, business mortgage interest payments, rent and lease payments and utility
payments. Be prepared to present a breakdown and documentation around each category.
You will also be asked to disclose the dollar amount for which forgiveness is requested,
including proof you have taken into account the limits on use of funds. For instance, you
will be asked to qualify that all payroll costs funds were utilized for equal or exceed at least

60% of the amount you are seeking forgiveness. You will also be required to tabulate
reductions to the extent you have not retained the same level of full-time equivalents. With
regards to funds allocated toward highly compensated individuals’ salary (money you
perhaps allocated towards yourself), you will have to detail the Covered Period you have
applied. For a 24-week Covered Period, the current proposed forgiveness application
states there should be invoked a cap of $20,833 per individual allocated or a cap of 2.5
months' worth of 2019 compensation for any owner employee or self-employed individual/
general partner. For an 8-week Covered Period, the current proposed forgiveness

application states there should be invoked a cap of $15,385 per individual allocated or a
cap of 8 weeks' worth of 2019 compensation for any owner-employee or self-employed
individual/general partner.

*h ps://www.sba.gov/document/sba‐form‐paycheck‐protec on‐program‐loan‐forgiveness‐applica on

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