The SBA in consultation with the Department of Treasury released the PPP Loan Forgiveness Application and instructions to complete the application.

The application includes: 
1. The PPP Loan Forgiveness Calculation Form [Submit to Lender];
2. PPP Schedule A [Submit to Lender];
3. PPP Schedule A Worksheet; and,
4. The PPP Borrower Demographic Information Form (Optional).

The form provides for a “Covered Period” or for an “Alternative Payroll Covered Period” that aligns with the borrower’s regular payroll cycle for administrative convenience. 
The “Alternative Payroll Covered Period” allows a borrower with a biweekly, or more frequent payroll schedule, to elect to calculate eligible payroll costs using the eight-week (56 day) period that begins on the first day of their first pay period following the PPP Loan Disbursement Date (the “Alternative Payroll Covered Period”). Example: If the Borrower received the PPP loan proceeds on Monday, April 20th, and the first day of the pay period following the PPP loan disbursement is Sunday, April 26, then the first day of the “Alternative Payroll Covered Period” is April 26th and the last day of the “Alternative Payroll Covered Period” is Saturday, June 20th. 
A borrower who elects to use the “Alternative Payroll Covered Period” must apply the “Alternative Payroll Covered Period” wherever there is a reference in the application to the “Covered Period” or the “Alternative Payroll Covered Period”; however, a borrower must apply the “Covered Period” and not the “Alternative Payroll Covered Period” wherever there is a reference in the application ONLY to the “Covered Period.”

FTE Reduction Exceptions: A new exemption from the loan forgiveness reduction includes a borrower’s good faith, written offer to rehire workers that was declined. 
Indicate the FTE of any position for which the borrower made a good-faith, written offer to rehire an employee during the “Covered Period” or the “Alternative Payroll Covered Period” and was rejected by the employee; and any employee who during the “Covered Period” or “Alternative Payroll Covered Period” that was fired for cause, voluntarily resigned, or voluntarily requested and received a reduction of their hours.In all of these situations, include these FTEs only if the position was not filled by a new employee. Any FTEs in these instances do not reduce the Borrower’s loan forgiveness.

FTE Reduction Safe Harbor: A “safe harbor” exempts certain borrowers from the loan forgiveness reduction based on FTE employee levels. A borrower is exempt from the reduction in loan forgiveness based on FTE employees, as described, if both the following conditions are met:
1. The borrower reduced its FTE employee levels in the period beginning 2/15/2020 and ending 4/26/2020; and,
2. The borrower then restored its FTE employee levels no later than 6/30/2020 to its FTE employee levels in the borrower’s pay period that included 2/15/2020.

Costs Eligible for Loan Forgiveness
In general, a borrower is eligible for forgiveness for the payroll costs paid and payroll costs incurred during the eight week (56 day) “Covered Period” or “Alternative Payroll Covered Period.” Payroll costs incurred but not paid during the borrower’s last pay period of the “Covered Period” or the “Alternative Payroll Covered Period” are eligible for forgiveness if paid on or before the next regular payroll date; otherwise, payroll costs must be paid during the “Covered Period” or the “Alternative Payroll Covered Period.”
For each individual employee, the total amount of cash compensation eligible for forgiveness may not exceed an annual salary of $100,000, as prorated for the covered period. Payroll that is both paid and incurred only once is included.

Nonpayroll Costs Eligible for Loan Forgiveness
1. Covered mortgage obligations: interest payments (do not include any prepayment or principal payment) on a business mortgage obligation on real or personal property incurred prior to 2/15/2020—“business mortgage interest payments”;
2. Covered rent obligations: business rent or lease payments for real or personal property in force prior to 2/15/2020—“business rent or lease payments”; and,
3. Covered utility payments: business payments for electricity, gas, water, transportation, telephone, or internet access in force prior to 2/15/2020—“business utility payments.”
An eligible nonpayroll cost must be paid during the “Covered Period” or incurred during the “Covered Period” and paid on or before the next regular billing date, even if the billing date is after the “Covered Period.” 
An eligible nonpayroll cost cannot exceed 25% of the total forgiveness amount. Count nonpayroll costs that were both paid and incurred only once.

The amount of loan forgiveness the Borrower applies for may be subject to a reduction as shown in PPP Schedule A.

SBA will issue regulations and guidance to assist borrowers in completing their applications and provide lenders with additional guidance on their responsibilities.