On May 15, 2020, the U.S. Treasury issued the Paycheck Protection Program (PPP) loan forgiveness application (you can access it here). This highly-anticipated release provides some, but not all, answers to open questions that borrowers have had related to PPP loan forgiveness.
Payroll Period Updates
The application introduces a new term, “Alternative Payroll Covered Period,” that appears to provide some flexibility to borrowers to elect a different start date of the Covered Period to align with the first day of a pay period following disbursement of a PPP loan. The Alternative Payroll Covered Period would provide administrative relief to borrowers that received a loan in the middle of a pay period by aligning the start of the pay period with the start of the loan.
Example provided in the application: If the borrower received its PPP loan proceeds on April 20, and the first day of its first pay period following its PPP loan disbursement is April 26, the first day of the Alternative Payroll Covered Period is April 26 and the last day of the Alternative Payroll Covered Period is June 20.
However, other references to the covered period that do not reference "Alternative Payroll Covered Period" would still apply the original dates.
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