Pub. 2 2020 Issue 2

M A R C H / A P R I L 2 0 2 0 10 nebraska cpas permitted to receive duplicative amounts for the same expenses under multiple SBA programs. We note that the Rules provide that the maximum principal amount calculation is based on the average monthly payroll costs for “the last 12 months,” which would suggest that these payroll costs are to be measured on a trailing 12-month basis. However, the most recent draft of the application for the Paycheck Protection Program instructs applicants to use their “average monthly payroll for 2019” for purposes of determining the principal amount. The SBA has not yet provided any additional guidance to resolve the inconsistency between the Rules and the application. The Rules also clarify that a borrower may not receive more than one loan under the Paycheck Protection Program and suggest that, for this reason, borrowers should consider applying for the maximum principal amount. Additionally, the Rules provide that because independent contractors can apply for a loan under the Paycheck Protection Program on their own, any payments made to an independent contractor do not count for purposes of a borrower’s payroll cost calculation. What is the maximum interest rate on the loans made under the Paycheck Protection Program? The Rules set the interest rate on all loans made under the Paycheck Protection Program at 1% per annum. What are the permitted uses for the proceeds of loans made under the Paycheck Protection Program? In addition to uses already permitted under the SBABusiness Loan Program, the proceeds of the loan may be used for the following purposes: • Payroll costs, including, but not limited to, wages, salary, vacation and sick leave, and retirement benefits • Group health care benefits • Interest on mortgage obligations • Rent payments • Utility expenses • Interest on debt incurred before Feb. 15, 2020 Payroll costs are capped at $100,000 per year for any employee, prorated for the covered period. The Rules provide that borrowers under the Paycheck Protection Program must apply at least 75% of the loan proceeds toward