The application for forgiveness of loans made under the Payroll Protection Program (PPP) was released by the Small Business Administration (SBA) late May 15, 2020. Businesses that received loans under the program may now access the application to calculate how much of their loan may be forgiven.

The application also provides further guidance and clarification on forgiveness.

Among the noteworthy information included, the application provides:

• Flexibility to select a slightly different eight-week period for purposes of calculating payroll costs. This is called the Alternative Payroll Covered Period. If selected, this Alternative Payroll Covered Period must be used consistently for payroll and FTE issues.

• Flexibility to include costs actually paid during the applicable covered period OR incurred during the applicable covered period and paid on or before the next due date.

• Clarification on how to calculate FTEs from full-time and part-time employees.

• Allow exceptions to FTE reductions based on employees that refused to come back to work, were fired for cause, voluntarily resigned or voluntarily requested and received a reduction of their hours.

Also, the SBA issued an interim rule on May 18 clarifying that for purposes of determining eligibility for the PPP, a company must include employees of all U.S. and foreign affiliates. There had been confusion as to whether a company could be eligible if it had no more than 500 employees whose principal place of residence is in the U.S., regardless of the employees of its foreign affiliates. However, the SBA also stated that it would not find any borrower that applied for a PPP loan prior to May 5, 2020 to be ineligible based on the company's exclusion of non-U.S. employees from the company's calculation if the company (together with its affiliates) had no more than 500 employees whose principal place of residence is in the U.S. The SBA concluded the rule prohibiting the use of PPP loan proceeds to support non-U.S. workers or operations.