- July 14, 2020
PPP Update: Outline of Major Dates, Deadlines and Directives
As an additional resource for PPP borrowers, the attorneys at Burke, Warren, MacKay & Serritella, P.C. have created a chart summarizing the most significant deadlines, time periods, dates and formulas relating to PPP loans and forgiveness which can be found here.
The PPP program suffers from a myriad of overlapping, conflicting, and confusing time periods and standards that makes compliance daunting. The summary attached will help, along with a template spreadsheet for computing the amount of forgivable portion of the PPP loan.
The following factors complicate application of the rules, and necessitate the chart:
- There are four basic sets of standards and time periods: maximum loan amount, maximum forgiveness, reduction of the forgiveness, and exceptions to the reduction of the forgiveness. Some rules span multiple categories.
- In addition to the standard time periods to measure amounts and eligibility, the statute and rules allow borrowers to choose “alternative” time periods. The alternatives, however, differ depending on whether being applied to maximum loan, maximum forgiveness, or other purposes.
- The statute, the “Interim Final Rules”, the guidelines, and various application instructions partially conflict.
- The US Treasury and the SBA have ignored conventional administrative and common law interpretive standards where a clear and superseding rule should control over an earlier vague rule (such as the case with certification regarding the need for the PPP loan). Intense political pressure motivated the US Treasury and the SBA to ignore these standards. In certain cases, these governmental entities dropped the most recent version of a rule in favor of a more politically popular earlier version.
- The statute, rules and guidance at times use different terms for the same concept or, incredibly, the same term for different concepts.
- In addition to the four basic sets of rules, the guidance applies certain time periods differently. Be careful when reading the rules. The same period for measuring the maximum loan amount may not apply to fixing the maximum loan forgiveness, or be relevant to certain loan forgiveness “safe harbors.”
- The rules, compared with most Federal guidelines, are vague, inconsistent, and incomplete.
Bottom line – borrowers should:
- Use the Excel templates from accounting firms that borrowers know and trust.
- Double-check the Excel spreadsheets with the actual rules and borrower financial information.
- Appreciate that audit and compliance oversight by banks and the government will almost certainly be inconsistent and incomplete. These rules are not even remotely as coherent as the tax code.
- The forgiveness instructions are the latest and most complete set of rules.
- Not use the chart below as a summary of rules; rather, this is to be used by those already familiar with the PPP loan rules who are working with Excel templates to complete the forgiveness application.
- Use the references in the chart below to review cited documents for more complete terms and conditions. Context is important for these otherwise incompletely and inconsistently defined terms. See the BMWS PPP Bible for a searchable master compendium of the relevant documents
Regardless of the confusion, borrowers that put forth a good faith effort, while substantially honoring these rules, should succeed in retaining most, if not all, of the promised forgiveness of their PPP loan.