The SBA has issued formal guidance in the form of an ‘interim final rule’ detailing the Paycheck Protection Program ("PPP") loan forgiveness application process. The interim final rule provides guidance to accompany the forgiveness application instructions released approximately one week ago. Key highlights of the interim final rule include clarification that:

  • Loan amounts not eligible for forgiveness may be repaid over a two-year term with interest accruing at 1%.
  • Amounts eligible for forgiveness include certain expenses incurred during the eight-week measuring period but not yet paid.
  • Relief from full-time equivalent requirements in the case of employees fired for cause, voluntary resignations, or refusal to return to work.
  • Use of an alternative payroll period for entities with a bi-weekly or shorter payroll cycle is available.

The PPP Loan initiative authorized by the CARES Act is intended to provide small businesses with critical liquidity to fund payroll and other specified costs to curtail layoffs in a paused economy. Borrowers complying with SBA requirements can apply for forgiveness on amounts paid or incurred for eligible costs over an eight-week measuring period.

The rapid response required by the COVID-19 crisis resulted in the lightning fast rollout of the PPP loan program. This rushed rollout was necessary but resulted in businesses applying for PPP loans while the rules of the program were still being developed. Even now, SBA continues to release further guidance and clarification while businesses face the end of their eight-week loan compliance measuring periods. Numerous questions continue to face borrowers ranging from how to calculate amounts eligible for forgiveness to whether or not the borrower was eligible for a PPP loan in the first place.

PPP loan borrowers need guidance to successfully navigate the rapidly evolving regulatory framework. As borrowers prepare to complete loan forgiveness applications, the need for guidance is more critical than ever and faces higher stakes. The attorneys at McLaughlinQuinn LLC have followed the government’s legislative response to the COVID-19 pandemic and the relief programs available to businesses. We have advised clients throughout the PPP loan process from its inception and are continuing to do so. Our attorneys are now advising clients on calculating eligible forgiveness amounts and completing the new SBA forgiveness applications.

Businesses that borrowed funds under the PPP loan program facing questions regarding loan forgiveness should contact the attorneys at McLaughlinQuinn LLC to discuss the SBA’s recent guidance and to obtain assistance completing the new applications. 

For more information on this client update, contact Cory J. Bilodeau, Esq., LL.M., Tax Planning Partner, at (401) 655-2203 or via email at This email address is being protected from spambots. You need JavaScript enabled to view it. , or Matthew R. Joyce, Esq., LL.M., Tax Counsel, at (401) 655-2208 or via email at This email address is being protected from spambots. You need JavaScript enabled to view it. .