SBA Frequently Asked Questions (FAQs) for PPP Loans Following the Interim Final Rule

Apr 10, 2020

SBA Frequently Asked Questions (FAQs) for PPP Loans Following the Interim Final Rule

Even after the SBA issued its Final Interim Rule on April 2nd, there have been many lingering questions for borrowers and banks. The banks are worried that they will be held to a high level of oversight even though the Treasury and SBA keep telling them they won’t. Borrowers still don’t know the answers to some very basic questions about how to calculate “payroll costs” for determining the amount of their PPP loan.

The SBA has followed its Interim Final Rule with a series of FAQs that answer many of these lingering questions, and it will continue adding to the list. Here is the link. You can check it periodically to see any new Q&A that gets added.

Here is a summary of the more important FAQs so far. If you haven’t applied for your PPP loan yet, some of these points will be very useful to you:

  • The exclusion of compensation in excess of $100,000 per year applies only to wages. It does not apply to retirement plans and health insurance premiums. Therefore, these should be added onto the $100,000 of wage income.
  • These FAQs permit both profit sharing/401(k) and cash balance plans. Therefore, add the full annual plan contributions into your “payroll cost” calculations when calculating your maximum loan amount.
  • The time period that borrowers can use to determine their historic payroll costs and calculate their loan amount can be the previous 12 months or calendar year 2019.
  • Payroll is based on “gross” pay, not net pay after federal and state income tax withholding, employees 401(k) salary deferrals and the employee’s share of Social Security and Medicare taxes.
  • Amounts paid to independent contractors should not be included in the employer’s calculation of its payroll costs. The independent contractor should be applying for a PPP loan in its own right.
  • As for loan forgiveness, the eight-week period begins on the date that your bank disburses the PPP loan to you, not the date of your loan application.
  • Lenders can rely on the representations made by the borrowers and only have to make cursory but “good faith” review of the payroll records that the borrower submits with its loan application. (The banks continue to want such reassurance).
  • For a practice with multiple owners, only one needs to sign the loan application, not all of them.
  • Before the PPP loans fund, borrowers will need to sign a promissory note. The bank can use its own form of promissory note or a version supplied by the SBA.

Collier & Associates, Inc. will update our blog as the CARES Act progresses. We take pride in continuing to keep our subscribers and website visitors updated on current events during this extraordinary time.

We will work diligently to answer general inquiries via our website if time permits and in a little more detail within our Newsletters. However, if your questions are detailed in nature, please request to set up a conference call for a formal legal consultation. Thank you.


Collier & Associates, Inc. provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act on this information without seeking advice from professional advisors.


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  1. Brian McCurdy on at 3:04 pm

    Brandon, my wife and i are partners in our dental practice [the practice is a partnership]. How do we apply to get payment for our own income? Do we each apply seperately for ppp? we did not see a place for our income on the ppp form that we filled out for the practice. Is our income called “earnings from self employment” ? Thank you brian mccurdy

    • C&A on at 12:46 pm

      Hi, Dr. McCurdy. If you are a partnership, you would not apply separately. Unfortunately, I am not sure what form you had to fill out. The form we are familiar with is the PPP Loan form that was made public from the SBA. However, the banks can create their own forms as well too. On the form that is public on the SBA website has a section for “average monthly payroll,” that’s where your average net income would go if you’re self-employed, schedule C. If your bank’s PPP application has something different, I’d recommend consulting with your banker for clarity. I hope this helps. Thanks!

  2. L. Sean Mullins DDS on at 7:29 am

    Can the PPP loan be used to pay the 2019 401K profit sharing portion of your office’s retirement plan? And what is your opinion about whether this would be forgiven or not?

    Brandon….Thanks so much for all of your help during these crazy times!! It’s has been greatly appreciated!!

  3. Matt, client on at 6:29 pm

    Could my 17 year old daughter apply for unemployment. she has being getting paid thru the practice.

  4. Diana Liley on at 3:22 pm

    A sole proprietor doctor’s net to $100,000 is included in calculation of loan amount for PPP. Are payments for 8 weeks
    ($8333/ mo x 2), then forgivable as “payroll” to the owner doctor?

    • Glen Spinelli on at 8:17 pm

      same question. And can I take the 20,000 immediately as pay?

  5. William Sulkowski on at 2:36 pm

    Brandon If I applied for sba paycheck for my office , Can I also apply for a sba Loan for my real estate properties some are llc entities others owned by my wife and me Thank you Bill


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