Financial Advisory Blog

Armanino’s Financial Advisory blog is your source for thought leadership around cloud ERP and accounting solutions and integrations. Supported by the Cloud Accounting Institute and numerous experts in cloud, finance, reporting, integration, compliance, and technology, Armanino’s Financial Advisory blog features must-read content on what’s happening in the finance industry, case studies, white papers, and much more.

July 23, 2020

What does it mean if an expense is allowed but not forgiven? Isn’t that the same thing or does “not allowed” indicate a future penalty or something?

Posted by Armanino Financial Advisory Team

Interest payments on non-mortgage debt obligations are “allowed” by Section 1102, paragraph 36(F)(i)(VII) of the CARES Act, which is part of the section that originated the PPP program. However, those payments are not included in the list of “forgivable” expenses by Section 1106, which details the forgiveness aspect of the law. Therefore, they are “allowable” but not “forgivable”. The fact that these particular costs may not be included in forgiveness does not suggest there will be future penalties associated with spending PPP funds on them; it just means you will need to pay the money back as part of the loan repayments.

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