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The much-anticipated application and guidance walk borrowers through the process of applying for the forgiveness of PPP loans in accordance with the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In a press release issued by the Department of the Treasury, the SBA “will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.”

 The CARES Act provided small businesses that have 500 or fewer employees the opportunity to apply for the PPP, administered by the SBA. Unlike the SBA’s Economic Injury Disaster Loan (EIDL), PPP loans are issued by SBA-accredited banks and financial institutions. The main purpose of the PPP is to assist small businesses in maintaining their workforce during the COVID-19 pandemic. Businesses that comply with requirements in accordance to the CARES Act may have their loans forgiven. Those requirements include using 75% of the loan to fund payroll-related expenses, including salaries, wages, and commissions; employee benefits; and state and local taxes. The remainder of the loan may be used for other qualifying expenses, such as mortgage payments, leases, and utilities. Funds must be used within an eight week period from the date they are dispersed by a lender. At the end of the eight weeks, borrowers may submit the forgiveness application to their lender for consideration.

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