Q&A on PPP Loan Forgiveness

Cardinal will be alerting you when further clarification on this topic is issued by the SBA or other federal entities.

Q. How do I get my PPP Loan forgiven?  

A.  You can spend the loan money on anything you want but if you want the loan forgiven you must meet some criteria. The lender has been put into the position of determining if you have spent enough money on employee payroll and retained enough employees to qualify for full or partial loan forgiveness. The lender will rely on forthcoming guidance by the Small Business Association (SBA). 

As the way the rules are written currently: the entire loan is forgivable if you do ALL of the following: 

  1. 100% of the proceeds went to Payroll, Rent, and Utilities.  
  1. At least 75% of the total being forgiven was Payroll and  
  1. You do not reduce your “Full Time Employee” [FTE] headcount. 

Q. How do I measure what is determined as “Payroll” under the PPP so I can meet that 75%? 

A. Cardinal can provide a detailed report on the types of payments and other employee costs that can be forgiven. You must verify that your lender is using the same criteria.  

Q. How do I measure my FTE headcount? 

A. Unfortunately, there is no definitive answer and the lender will determine if you maintained your FTE headcount. Contact your lender to see what criteria they will use to measure this. If you want to be proactive you can determine a methodology to count employees and plan on keeping this number consistent throughout the loan period. Check if your lender will accept this methodology and Cardinal can provide a report of employees and hours based on time periods that you specify. 

Q. What if I need to replace or hire more employees to retain my FTE headcount? 

A. There is nothing in the interim rules preventing you from hiring or rehiring employees to replace those that have been terminated or who have quit.   

Q. How do I get my reports?   

A. Email Cardinal at ppp@cardinal-services.com                            

Disclaimer: None of the information stated above is intended to be legal, tax, security, or financial advice.