Last night, the SBA released FAQs on the Paycheck Protection Program (PPP). These FAQs are linked here for your reference.

Below are some highlights showing clarifications organized by question number from the FAQs:

Q2: Can I apply if I have over 500 employees?
Yes, if you still meet the SBA employee-based or revenue-based size standards located at

Q7: $100,000 cap on employee compensation applies only to cash compensation, not to non-cash benefits, including:

  • employer contributions to defined-benefit or defined-contribution retirement plans;
  • payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums; and
  • payment of state and local taxes assessed on compensation of employees. (AL SUI)

Q10: BMSS found statutory guidance on this earlier, but PEO’s are explicitly mentioned and allowed in this FAQ.

Q14: This update confirmed the ability to use trailing 12 months or calendar year 2019 in calculating payroll costs.

Q16: Payroll costs are calculated as gross payroll instead of net for purposes of max loan amount, allowable uses of a PPP loan, and the amount of a loan that may be forgiven.
FAQs clarifies only the employer side of payroll taxes are excluded from Payroll Costs.

Q17: What if I filed or had a loan application approved based on previous guidance, do I need to take any action based on updated guidance in these FAQs?
No, may rely on guidance available at the time of the relevant application. Borrowers whose previously submitted applications have not been processed yet may revise their application based on clarifications reflected in the FAQs.

Guidance on affiliates was released with an interim final rule SBA IFR 2 and the Affiliation rules overview (for public). Please note there are significant questions regarding the application of the Affiliation rules. Please note that it is the responsibility of the borrower to determine affiliation and this is not an accounting or tax function. BMSS’ recommendation is that borrowers seek the advice of legal counsel in determining affiliation.

Self-employed individuals and independent contractors are eligible to apply for the PPP beginning Friday, 4/10.

Finally, please reach out to your BMSS contact should you need assistance in calculations needed for the PPP. As always, we are here to help you make the best decision for yourself and your business throughout this time.

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