July 23, 2020
The joint statement issued by the SBA and Treasury on June 8 states: “If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness Covered Period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.” What happens if we don’t hit the 60% threshold?
Posted by Armanino Financial Advisory Team
You will still be eligible for partial loan forgiveness. If you do not spend at least 60% of the loan proceeds on payroll expenses, your forgiveness amount will be reduced by limiting the amount of non-payroll costs that are forgiven until the 60/40 ratio is achieved.