CARES Act PPP Update: Clarity From SBA On Loan Calculation & More

Question #1: Do the lenders have to replicate the borrower's calculations?

No

Question #7: Does the exclusion of over $100,000 in compensation include/exclude benefits?

No, the $100k limit to compensation only applies to wages/salary. Benefits, retirement, and taxes can go over the $100k.  

Question #8: Do PPP loans cover paid sick leave? 

Yes, however, it excludes credits received under the Families First Coronavirus Response Act. 

Question #11: May lenders accept signatures from a single individual who is authorized to sign on behalf of the borrower? 

Yes, this is focused on the application and many churches/non-profits have been tripped up when asked about having a person owning more than 20% to sign the application. 

Question #14: Time period to determine the number of employees and payroll costs to calculate the maximum loan amount? 

Previous 12 months or calendar year 2019.  

Question #15: 1099 contractors are not included in payroll costs.  

Question #16: Federal taxes are included in determining payroll costs. However, the employer's portion that is paid direction to IRS is NOT included.  

Question #20: 8 weeks to determine payroll costs used (75% of the total loan amount) is determined to start when the borrower receives funds.  

Question #31: What if you have adequate sources of liquidity? 

The borrower must certify that "current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant."  

Question #32:  Does the cost of housing stipend or allowance provided to an employee as part of the compensation count towards payroll costs?  

Yes, Payroll costs include all cash compensation paid to employees, subject to the $100k annual compensation per employee limitation.