The Paycheck Protection Program and Loan Forgiveness
The CARES Act (the “Act”) hallmark provision is the potential for loan forgiveness under the Paycheck Protection Program (PPP). As PPP funds are received by businesses, now is the time to strategize for maximum loan forgiveness. The PPP has been advertised as a grant, and, in many respects, it can function like one. However, the onus is on businesses to earn 100% loan forgiveness. Many will find this a difficult endeavor. This article examines business loan forgiveness considerations.
The Act enumerates specific expenses that essentially generate a credit against the loan, reducing the amount that will need to be repaid. The Act provides an eight-week window to accumulate this credit, starting on the day the funds are disbursed to the borrower. For those that have already received funds, the clock is ticking.
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Posted April 23, 2020