Sparta Area Chamber of Commerce Newsletter April 2020 | Page 29

29 - The Sparta Ambassador - April 2020
4 Will this loan be
FORGIVEN?
Borrowers are eligible to have their loans forgiven.
WHAT'S
NEXT?
How Much?
A borrower is eligible for loan forgiveness equal to the amount the
borrower spent on the following items during the 8-week period
beginning on the date of the origination of the loan:
• Payroll costs (using the same definition of payroll costs used to
determine loan eligibility)
• Payments on utilities (electricity, gas, water, transportation,
telephone, or internet) Look out for more
information about eligible
lenders and additional
loan guidance.
• For borrowers with tipped employees, additional wages
paid to those employees Visit sba.gov for updates.
• Interest on the mortgage obligation incurred in the ordinary
course of business
• Rent on a leasing agreement
The loan forgiveness cannot exceed the principal.
How could the forgiveness be reduced?
The amount of loan forgiveness calculated above is reduced if there
is a reduction in the number of employees or a reduction of greater
than 25% in wages paid to employees. Specifically:
Reduction based on reduction of number of employees
PAYROLL
COST
Calculated
on page 2
Average Number of
Full-Time Equivalent
Employees (FTEs)
Per Month for the
8-Weeks Beginning
on Loan Origination
Option 1:
Average number of FTEs per month from
February 15, 2019 to June 30, 2019
Option 2:
Average number of FTEs per month from
January 1, 2020 to February 29, 2020
For Seasonal Employers:
Average number of FTEs per month from
February 15, 2019 to June 30, 2019
Reduction based on reduction in salaries
PAYROLL
COST
Calculated
on page 2
For any employee who did not earn during any pay period in 2019 wages
at an annualized rate more than $100,000, the amount of any reduction in
wages that is greater than 25% compared to their most recent full quarter.
What if I bring back employees or restore wages?
Reductions in employment or wages that occur during the period
beginning on February 15, 2020, and ending 30 days after enactment
of the CARES Act, (as compared to February 15, 2020) shall not reduce
the amount of loan forgiveness IF by June 30, 2020 the borrower
eliminates the reduction in employees or reduction in wages.
Prepared by t h e U.S. C HAMBER OF C OMMERC E