Recent guidance from the U.S. Small Business Administration (“SBA”) is causing some businesses to reconsider whether they are eligible for Paycheck Protection Program (“PPP”) loans and to contemplate returning loans they have already received.
The PPP, part of the $2.2 trillion federal stimulus bill enacted in response to COVID-19, was intended to provide low-interest, forgivable loans of up to $10 million to businesses that maintain their payrolls during the pandemic. Businesses that use PPP loan funds for employee payroll and certain other permitted expenses during an eight-week period beginning on the loan disbursement date generally are eligible to have the loans forgiven, with the forgiveness amount excluded from borrowers’ gross incomes.
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