Weaver’s Top 50 List: Understanding the Paycheck Protection Program

We compiled this top 50 list of frequently asked questions about the Paycheck Protection Program (PPP) based on the many inquiries we’ve received from businesses and individuals across the country since the CARES Act was enacted on March 27, 2020. As we support our clients through the COVID-19 pandemic, we will continue to share our insights on best practices and resources to help you prepare, adapt and respond to this unexpected and challenging business environment.

Download the FAQs to find our responses to the following questions.

Eligibility

1. Is it too late to apply for a PPP loan?
2. Who is eligible to apply for the PPP?
3. Do SBA’s revenue-based size standards apply in the determination of eligibility?
4. How does SBA calculate number of employees?
5. If I do not qualify for the PPP under the SBA’s size standards, what other options do I have?
6. Are 501(c)(6) entities eligible for the PPP?
7. I have income from self-employment and file a Form 1040, Schedule C. Am I eligible for a PPP Loan?
8. I am a partner in a partnership, am I eligible for a PPP loan?

Affiliation

9. What is “affiliation”?
10. How does SBA determine affiliation with another entity?
11. If a minority shareholder irrevocably gives up rights, is it still considered to be an affiliate of the business?
12. My company has affiliates, but we operate in different industries. Whose industry should I use to determine the employee-based size standard?
13. My company is private equity backed. Do the affiliation rules preclude my company from being eligible for a PPP loan?
14. Are there exceptions to the general affiliation rule?
15. Do the SBA’s affiliation rules apply to my faith-based, private not-for-profit organization?

Payroll Costs

16. What can be included in payroll costs?
17. What is not included in payroll costs?
18. Are bonuses included in payroll costs?
19. If I pay my employees cash benefits besides those specifically included in the definition of payroll costs in the statute, can I include them in my payroll costs?
20. Should payroll costs include federal employment taxes for purposes of calculating the loan amount?
21. Do independent contractors count as employees for purposes of PPP loan calculations?
22. There is an exclusion for employees earning more than $100,000. Does this mean that their salary is excluded entirely, or simply capped at $100,000?
23. As the owner of the business, is my Form W-2 paycheck from my own company covered by the PPP as well?​
24. I have income from self-employment and file a Form 1040, Schedule C. I do not have any employees. How do I calculate my loan amount?
25. I have income from self-employment and file a Form 1040, Schedule C. I have employees. How do I calculate my loan amount?

Loan Forgiveness

26. When does the 8-week covered period for purposes of loan forgiveness begin?
27. I have reduced my full-time equivalent employees (FTEE). How will that affect my loan forgiveness amount?
28. I have reduced salaries and wages. How will that affect my loan forgiveness amount?
29. Are independent contractors included in headcount for purposes of PPP loan forgiveness?
30. If I have already executed layoffs/furloughs, could I still be eligible for loan forgiveness if I bring back our employees?
31. For the loan forgiveness amount calculation, do we include allowable costs paid in the 8-week period following loan funding, or accrued?
32. Do the PPP loan proceeds have to be spent within the 8-week period following the loan funding date?
33. Can loan proceeds spent on rent, mortgage interest and utilities also be forgiven?
34. What is the impact of not meeting the 75% threshold of payroll costs for the forgiven amount?
35. Can I include rent paid to a related party during the 8-week covered period in my calculation of the forgivable amount?
36. Is the forgiven portion of PPP loan considered taxable income?
37. How can I request loan forgiveness?
38. If my loan is forgiven, will it be considered a default on the loan?
39. As an individual with self-employment income reported on Form 1040, Schedule C, what amount of loan proceeds will be eligible for forgiveness?

Access to Other Stimulus Programs

40. Can the SBA Economic Injury Disaster Loan (EIDL) be used in conjunction with PPP?
41. If I receive a PPP loan, am I also permitted to claim the employee retention credit?
42. If I receive a PPP loan and have a part of it forgiven, am I eligible for the payroll tax deferral?
43. Can I apply for more than one PPP loan?

Application Process

44. What do I need to do to apply?
45. What other documents will I need to include in my application?
46. Is it first come, first served?
47. Can I be turned down for the loan?
48. What impact will the PPP loan have on my existing debt covenants?
49. I already applied for the PPP loan. However, there have been several changes/clarifications to the regulations since I applied. Do I need to reapply?
50. How do I check the status of my PPP application?

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