July 23, 2020
If we request forgiveness before the end of 24 weeks, do we measure FTE and hourly wage reductions as of the time of the forgiveness application or do we have to wait until the end of the 24-week period?
Posted by Armanino Financial Advisory Team
This is a good question for which we await additional guidance from the SBA. The opportunity to file an application prior to the end of the Covered Period emerged as an aside in the middle of guidance not specifically related to this important topic. The only discussion connected early forgiveness to having to use the entire Covered Period for calculating the impact of the Salary Reduction Factor. It was silent on the FTE Reduction Factor. However, the Standard Form application does request information in both categories as of the earlier of either December 31, 2020 or the date the application is filed in order to determine potential Safe Harbor. Keep in mind that this application form was issued prior to the surprise notice that a borrower could file early, so we anticipate future guidance and possible changes in this.