Note: CEF bases our PPP guidance on US Treasury Department and Small Business Administration guidelines. Federal guidance will change. When guidance changes, CEF will keep you updated. CEF’s guidance is intended to be of educational nature and is not intended to mandate or supersede the business practices or decisions of your company, its owners, or managers. Please also consider consulting with your CPA or attorney.Get Access to Our Full Library of Small Business Resources
Small businesses receiving a Paycheck Protection Plan loan will seek all or most of their PPP loan to be forgiven. Eight weeks after your PPP disbursement was received, CEF PPP borrowers will apply to CEF for forgiveness through an online application/process. The process will be similar to the original application process, and our goal is to provide you as much information in advance as we can.
Loan forgiveness depends on:
Bright-line allowable expenses that qualify towards PPP forgiveness:
Bright-line NON-allowable expenditures of PPP loan proceeds:
Note: Such expenditures violate the terms of the CARES Act and may result in fines imposed by federal authorities.
In short, expenditures of PPP loan proceeds in any other areas than those shown in 1) and 2) under “Bright-line allowable expenses that qualify towards PPP forgiveness” are prohibited.
Employee Full Time Equivalent (FTE) Retention Requirement:
By no later than June 30, 2020, employee FTE count must be at pre-Covid levels.
Documentation Planning for Best-Chance PPP Loan Forgiveness
Your documentation planning path depends on your business type and how you file your federal taxes. Find your path on the following page. You should begin documenting now. Soon, CEF will provide special attestation forms to assist you. You will use these forms in your PPP loan forgiveness online procedure beginning in about eight weeks.
Note: Each “attestation form” mentioned below will show facts about how you make PPP-allowed payments. An attestation form is true to the best of your knowledge. You will use such forms in your application to CEF for PPP loan forgiveness. All attestation forms will be provided by CEF soon.
Documentation Planning for PPP Loan Forgiveness
|Path A||Path B||Path C|
|IRS 1040 Schedule C Filer||IRS 1040 Schedule C Flier||IRS 1120 or 1120S Filer|
|Does not pay employees||Pays W-2 Employees||Pays W-2 Employees|
|Note: 1099 contractors are not employees|
|Owner compensation replacement for 8 weeks||
|Payroll Documentation for 8 Weeks||
|Note: Non-profit 990 filers and partnership 1065 filers may have slightly different requirements|
While all attestation forms will be provided to you by CEF soon, you should begin record keeping now.