SBA, Treasury release Paycheck Protection Program loan forgiveness app

Daniel Fowler
May 20, 2020

Kabbage, Inc, a data and technology company providing small business cash flow solutions, reports it has received SBA approval to fund over 110,000 Paycheck Protection Program (PPP) applications, surpassing $3.5 billion. The low-interest, forgivable loans have been attractive to small businesses, but owners have had a lot of questions about how to ensure they won't have to repay the loan.

The United States is expected to revise its aid program for small businesses to cope with the economic fallout of the coronavirus outbreak, the Wall Street Journal reported on Sunday. It is also important to note that the "alternative" period applicable to payroll costs can not be used to determine non-payroll expenses included in the forgiveness calculation.

Kabbage revealed that as an SBA-approved lender serving small businesses with or without a pre-existing relationship, the online lender continues to see high demand from businesses with five or fewer employees.

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For purposes of determining whether the Borrower's loan forgiveness amount must be reduced due to a reduction in full-time equivalent employees (FTEs), the average FTE is calculated using the average number of hours paid per week, divided by 40 (rounded to the nearest tenth), with the maximum for each employee capped at 1.0 during the "covered period" or "alternative payroll covered period", as applicable. "We have the technology to respond to this national crisis and provide equal opportunity to the millions of business owners seeking relief".

According to the press release announcing the forgiveness application, the SBA will release additional "regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities".

The application and instructions provide step-by-step directions for borrowers to calculate their eligible forgiveness amounts. "In a matter of weeks, we will disburse more dollars to small businesses than we did in all of 2019, serve more new customers than our last two years combined, and process over 40 percent of the average PPP application volume of the largest three banks in the country".

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