Are you an employer who received a PPP loan? Are you wanting to apply for forgiveness, so that you don’t have to pay the SBA back? There are many who are interested in applying for the PPP forgiveness, and have been reaching out to our office, wanting to know the process. Many banks have not yet started the process on their portals, because they’re waiting for some final clarification’s from the SBA. But are you aware that you may not receive 100% forgiveness? There are many factors that can go into this.

First of all, did you receive an idol advance? This is the Economic Injury Disaster Loan, and each person could have $1,000 per employee paid as an advance that did not have to be paid back. But if you applied for this and received it, the Paycheck Protection Program is going to remove this amount from the forgiveness. So that if you had say $50,000 loan and you had $3,000 for your idol advance, then you would only have a maximum of $47,000 that could be forgiven.

Other factors that could impact the forgiveness is if your hours that you paid your employees dropped under the full-time equivalents that you had originally at the beginning of the year. So for instance, if between January and February 15th, you had an average of six full-time equivalents and it drops to five. Potentially, there could be forgiveness issues. However, if you offered the employees to come back to work and they chose not to, or you’re required to maintain social distancing, and some other safe harbor items, then that will protect you from that.

Also, if you dropped compensation for employees more than 25%, that could also hinder the amount of forgiveness you can receive. There’s a lot of changes that have been happening over the months. So if you have any questions, you could feel free to reach out to us at or (310) 534-5577. And if you need help applying for forgiveness, feel free to reach out for that as well. I hope you found this information helpful, and again, if you have questions, feel free to reach out. Thanks so much and have a great day.

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