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Asked a question 10 months ago

Hello. I'm wondering about the flexibility to a 24-week coverage period on the PPP. The funds were disbursed on 4/27. We need an additional four weeks to spend all of the funds. Until what date are we obligated to maintain FTE count and salaries? Is it a choice only between 8 weeks or 24 weeks or can we do something in between? During Ami's seminar, he mentioned until 12/31/20, but that's way beyond 24 weeks for us.

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In Multifunding SBA CoronaVirus Support you can ask and answer questions and share your experience with others!

Rebecca Schultz
Founder/Executive Loan Consultant at Synerlock

Business owners can pick which option (8 weeks or 24 weeks - known as covered period) best serves their needs. No need to tell your PPP lender, just complete the proper PPP forgiveness application and submit after your chosen covered period. If you elect the 24 week covered period, you have to maintain or comply with the FTE and salary hourly wage requirements through the full covered period. Note: The date mentioned in the webinar was the end date for the 24 week covered period. It’s actually 24 weeks (168 days) or 12/31/2020 whichever is sooner. 

If you are like many small business owners opening slowly and following all CDC guidelines, the Safe Harbor rules around FTE and salary hourly wages are supportive. Quick breakdown below:

FTE Safe Harbor for the 24 week covered period requires you rehire or attempt to fill vacant positions (rebuilding FTE to pre-disaster/reference period of your choice - 3 options). If you cannot fill the positions because of safety concerns, you need to document and connect to the governing body giving direction. To avoid penalties for FTE you have to bring your full-time equivalent headcount back to pre-disaster levels (chosen reference period - 3 options) by the end of your covered period (last payroll should have all employees).

FTE SaFe Harbor 8 weeks is simpler. You can document lost FTE if: 1) They refused to come back after written offer with same wage and hours. 2) Fired for cause 3) Resigned 

You also document any employee requested reduced hours for personal reasons impacting your FTE counts. As long as you have your documentation in connect to the 8 week covered period, you can claim Safe Harbor and avoid FTE penalty.

Remember, you file your PPP forgiveness documentation after you reach the end of your covered period selection AND have all required support documents to provide your PPP lender. Support documents for approved non-payroll expenses include statements 1 month past your covered period. In some cases, business owners will not be able to file PPP forgiveness applications till 1 month past the end of the covered period.

Hope this clears up your question! Good luck!

Per the U.S. Treasury Department, you can submit for loan forgiveness at anytime during the 24 week period. It's also mentioned on Page 9 of the Interim Final Rule > 

I also like a lot of what Rebecca is saying. For example, allow some time to capture your documentation. For example, quarterly payroll reports will not get filed until several weeks after your forgiveness period (all PPP $ is spent). You also have 10 months to apply for forgiveness after you have spent the money. So I would encourage everyone to elect 24 months and submit once you know you are ready before the full 24 months since this takes you into the next flu season and you run the risk of losing some of your forgiveness if things shut down again. 

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