The U.S. Small Business Administration (SBA), in consultation with Treasury, in July 2020 released a revised loan forgiveness application for the Paycheck Protection Program (PPP). The SBA also unveiled a new EZ application for forgiveness of PPP loans. The applications reflect changes to the PPP made by the Paycheck Protection Flexibility Act of 2020, which became law June 5, 2020.
The releases came only hours after the SBA issued a new interim final rule providing guidance on how to calculate employee and owner compensation for loan forgiveness in the new 24-week covered period created by the Paycheck Protection Flexibility Act. Congress passed the Paycheck Protection Flexibility Act to make it easier for small businesses and other PPP borrowers to qualify for full loan forgiveness. Among the changes in the act are:
• An expansion of the “covered period” for loan forgiveness to 24 weeks from eight weeks,
• A reduction of the proportion of proceeds that must be spent on payroll costs to 60% from 75%,
• The establishment of a safe harbor for businesses that have been unable to return to the level of business activity they had before the COVID-19 pandemic due to compliance with health and safety guidelines for slowing the spread of the virus.
PPP funds are available to small businesses that were in operation on Feb. 15 with 500 or fewer employees, including not-for-profits, veterans’ organizations, Tribal concerns, self-employed individuals, sole proprietorships, and independent contractors. Businesses with more than 500 employees in certain industries also can apply for loans.
Congress approved $349 billion in PPP funding. After that money was quickly exhausted, Congress authorized another $310 billion, bringing the program total to $659 billion.
This course is designed to walk through and discuss the many concepts involved in the SBA PPP Loan Forgiveness application. We will also cover areas of the revised PPP Loan Forgiveness Application and instructions include a number of notable items.
Publication Date: February 2021
Designed For
Accountants and Finance professionals, Internal auditors/Professionals considering the role of internal audit, Legal and Compliance professionals.
Topics Covered
- Background
- PPP First and Second Draw Loans
- What Form Do I Use?
- Basics
- Line by Line Forgiveness Form
- FTE Reduction Safe Harbors
- Forgiveness Amount Calculation
- Process Summary
- Examples
- Documents Each Borrower Must Submit with PPP Loan Forgiveness Application
Learning Objectives
- Describe the background of the PPP Program
- Recognize the first and second draw PPP Loans
- Recognize which forgiveness application to use
- Identify the basics involved in forgiveness calculation
- Describe the SBA PPP Forgiveness form and instructions and how to utilize them
- Recognize how to estimate your PPP loan forgiveness
- Identify what incorporates eligible payroll costs
- Describe the requirements for documentation
- Describe unique elements of the PPP forgiveness process
- Recognize components of covered nonpayroll costs
Level
Update
Instructional Method
Self-Study
NASBA Field of Study
Accounting (1 hour), Auditing (1 hour)
Program Prerequisites
Basic understanding of accounting and auditing.
Advance Preparation
None
Instructor
Lynn Fountain
Lynn Fountain has over 38 years of experience spanning public accounting, corporate accounting and consulting. 20 years of her experience has been working in the areas of internal and external auditing and risk management. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance. Lynn has held two Chief Audit Executive (CAE) positions for international companies. In one of her roles as CAE, she assisted in the investigation of a multi-million-dollar fraud scheme perpetrated by a vendor that spanned 7 years and implicated 20 employees. The fraud was formally investigation by the FBI and resulted in 5 indictments estimating a $13M fraud loss.
Ms. Fountain is currently engaged in her own consulting and training practice. She is a highly sought-after trainer and international speaker. In addition, Ms. Fountain has assisted numerous companies with enterprise risk management frameworks, internal audit processes and financial accounting. She also serves as a discussion leader for the AICPA for numerous classes finance, accounting and risk management topics.
Ms. Fountain is the author of three separate technical books. Her first book released in 2015 by the Institute of Internal Auditors Foundation is entitled “Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations”. Her second book “Leading the Internal Audit Function” was released in October 2015 by Taylor & Francis Publications. This book serves as the initial launch for a series of leading practice internal audit and information technology publications. Her third book “Ethics and the Internal Auditor’s Dilemma” was released in December 2016.
Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials.