Payroll Protection Program Update

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law. One of the primary programs in the CARES Act is the Paycheck Protection Program, which was designed to provide small businesses with fully or partially forgivable loans, with the goal of staff retention. Since the passage of the CARES Act there has been some continuing ambiguity as to the some of the details of the Paycheck Protection Program, including in regard to the requirements for forgiveness.

On Friday, May 15, the Small Business Administration (“SBA”) released its Loan Forgiveness Application (“Forgiveness Application”) for the Paycheck Protection Program loans. The Forgiveness Application, and its instructions, have provided some clarity regarding the requirements for forgiveness, including explicitly allowing for certain costs to be forgiven if they were either payed or incurred during the applicable covered period. Additionally, the Forgiveness Application provides for an “Alternative Payroll Covered Period” that may be used by borrowers that use a biweekly (or more frequent) payroll schedule in calculating payroll costs that are eligible for forgiveness.

If you have any questions about the Paycheck Protection Program and eligibility for forgiveness of these loans, please contact McNeelyLaw’s attorneys by visiting www.mcneelylaw.com or calling our office at 317-825-5110.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.