There has been a lot of question around how to gain forgiveness for a Paycheck Protection Program (PPP) Loan. It seems we may finally have some guidance. The Small Business Administration (SBA) has released a PPP Loan Forgiveness Application. It is relatively well known that the purpose of PPP Loans was primarily to aid small businesses in sustaining their payroll; however, the loan was allowed to be used on some other expenses. Many have been wondering what costs the loan can be used on and still be forgivable. The Forgiveness Application that came out this weekend has provided some insight into what nonpayroll expenses will be eligible for forgiveness.
Although the aforementioned Forgiveness Application provides some answers, there is still a lot of confusion surrounding the forgiveness process. The American Institute of CPAs (AICPA) has expressed concern that the lack of information has and will make it very difficult for small businesses and CPAs alike to make crucial decisions because they do not have a clear set of parameters. Erik Asgeirsson, the president and CEO of CPA.com, said, “It’s clear the application form and instructions provided yesterday are not enough. Some of the most pressing issues are not addressed, and in other areas, it appears new questions have arisen.”
While there is still a lot of information needed from the SBA, the AICPA has created a loan forgiveness calculator that may be able to offer some guidance. It has been updated to factor in what was learned through the Forgiveness Application and will hopefully be helpful to anyone who has questions about how loan forgiveness will work for them.
The calculator can be reached through this link:
“The AICPA loan forgiveness calculator provided more support and details than the SBA loan forgiveness application, and we will continue to encourage Treasury and SBA to leverage our recommendations. We will now reconcile our calculator with this form and publish an updated version with additional recommendations and direction for our 44,000 CPA firms,” said the AICPA’s executive vice president of firm services, Mark Koziel, CPA, CGMA.