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PPP Loan Forgiveness: Rules & Guidelines

The SBA will forgive most PPP loans if the funds were used to cover approved payroll costs and some other costs of running a business. Find out if you qualify for forgiveness and how to apply.

    Erica Seppala
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Erica Seppala

Erica Seppala

Expert Analyst & Reviewer at Merchant Maverick
An expert in accounting, finance, and point of sale, Erica has been researching and writing about all things small-business since 2018. Erica's insights into personal and business finance have been cited in numerous publications, including MSN, Real Simple, and Reader's Digest. She is a graduate of Limestone College.
Erica Seppala
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107 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Tracy

    Question, we were granted the first PPP Loan and not the Second one. The majority of our employees are 1099 employees – hence being approved for first loan and not second one. We were informed all of the 1099 employee’s wages paid cannot be used for forgiveness. Is this correct?

    Second Question: We have a corporate apartment in the name of the company. Can we use this expense we pay when providing expenses spent?

      This comment refers to an earlier version of this post and may be outdated.

      Erica Seppala

      Hi Tracy!

      That is correct. Wages paid to 1099 workers can’t be used when calculating loan forgiveness.

      Based on guidance from the Treasury, I would say that the expenses for the corporate apartment would not be eligible for loan forgiveness. Rent and utilities are covered if they are used in a space that is used solely for business purposes. Examples would be a storefront, office, or even a warehouse that is used solely for storing business equipment. I haven’t seen any information from the SBA or the Treasury that indicate that expenses associated with a corporate apartment would qualify for loan forgiveness. Of course, you can always reach out to your lender directly to inquire about any special circumstances. Good luck!

        This comment refers to an earlier version of this post and may be outdated.

        E Landau

        Please advise if monthly fees paid to an accounting firm is eligible for PPP Forgiveness.
        Thank you.

          This comment refers to an earlier version of this post and may be outdated.

          Erica Seppala

          Hi there!
          Under the SBA’s rules for the PPP loan, accounting services are a covered operational expense. When applying for forgiveness, make sure to include proper documentation of accounting fees that were paid. Per the SBA, documentation may include “invoices, orders or purchase orders paid, and receipts, cancelled checks or account statements.” Good luck!

            This comment refers to an earlier version of this post and may be outdated.

            Julie Bushor

            I have a question regarding covered supplier costs. Are we able to include costs for materials needed in production or equipment repairs, as long as the purchase order was before the covered period (we do not have perishable items), but paid during the covered period? I just need a better understanding of what I can use in this category. Thanks.

              This comment refers to an earlier version of this post and may be outdated.

              Erica Seppala

              Hi Julie!

              According to the SBA, supplier costs are covered if the supplies being purchased are essential for the business. Additionally, the SBA says that payments made to “suppliers of goods pursuant to contracts, orders, or purchase orders in effect before the covered period” are covered. If the purchase order was in place prior to the covered period and the supplies were essential to your business, this should be a forgivable expense, even if the payment was made during the covered period.

                This comment refers to an earlier version of this post and may be outdated.

                Julie Bushor

                Thank you so much.

                  This comment refers to an earlier version of this post and may be outdated.

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