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Comment by eric_b | Hacker News Reader

Politicized? Give it a rest.

Yes, if a company spent 60% (down from 75%) of their loan on payroll, and does not exceed the 20k cap per employee, and retained the same number of employees they had at the beginning of the covered period, and can document all this, and they followed the initial SBA guidance when deciding how big of a loan to apply for, then they will get most or all of the loan forgiven.

There are lots of comments here about "what about the nail salon who has 14 employees and took 5-10M?!?!". Well, assuming that isn't just a case of bad data, there is no reasonable expectation that the loan will be forgiven in it's entirety. The majority will need to be returned to the lender plus interest.

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>"what about the nail salon who has 14 employees and took 5-10M?!?!".

If true that is an obvious case of fraud and you are making my point, the only time a loan will be repaid is if the money was spent on things other than payroll...which amounts to fraud.

Who cares if its a nail salon? Math is math, if you have 14 employees the maximum eligibility would be 8 weeks of payroll with a cap at $100k salary + up to an addition 25% for non-payroll expenses. $5-$10M for a business with 14 employees is fraud on its face.

I know lots of folks who got PPP loans. I don't know anyone who's getting 100% of their loan forgiven. Mainly because they took 2.5x monthly payroll as a loan - but then did an 8 week covered period (2x monthly payroll). Most of them will owe ~20% of the loan back to their lender since they had minimal other expenses.

I believe that ~20% portion is forgivable as well so long as it was an approved expense and they the ~80% was put towards payroll.

It's all forgivable. And the PPP Flexibility Act raised the cap on non-payroll spending from 25% to 40% of the amount of the loan.

> I don't know anyone who's getting 100% of their loan forgiven.

I don't think you know that many people then. I don't know a ton, but everyone I know is expecting to get 100% of the loan forgiven. Main reason being you just need to show that money is spent on payroll, mortgage interest and utilities. For a lot of businesses it isn't that hard to shift accounts around to show those costs are higher than their PPP amounts.

>Most of them will owe ~20% of the loan back to their lender since they had minimal other expenses.

That was my entire point is that the loans were designed to forgive a minimum of 75% of the loan, but it is 100% forgiven if they limited their loan application to 8 weeks of payroll.

All the people you know took 20% more for salary than they were supposed to and they should pay it back. Even based on your personal experience you should know this isn't the way to describe the program:

>These are loans. They are two year low interest loans. They have to be paid back unless some or all is forgiven.

Rather in your personal experience most of the loans will be 80% forgiven.

Eh, I think the way I described it was fine. These are loans. I don't know anyone who's had even a single dollar forgiven yet. As far as I know there has been no official "forgiveness".

What do you call a loan that you still owe? A loan. Once the forgiveness guidance is finalized and people are actually receiving it, then perhaps I will recharacterize my description.

If I give you $80,000 and loan you $20,000, the semantically important part of my action is as a "gift", not a "loan". Why do you want us to ignore the $80,000 and only pay attention to the $20,000?

>I don't know anyone who's had even a single dollar forgiven yet.

This is what I meant by political couching: Do you know any one who has paid back a single dollar?

>These are loans.

Fine care to loan me $1M and I'll pay you back 20% with interest.

Loans always have delayed payment terms, you're being willfully obtuse.

>Loans always have delayed payment terms, you're being willfully obtuse

And how often do they have forgiveness terms?

What are you talking about? Every loan I've ever taken out (car, mortgage), except for school, had a payment due the first month after I took out the loan.

It is not true that entire loan is forgiven if the payroll percent is met. Only the actual money spent on forgivable expenses (payroll + rent + interest on some debt) is forgivable. If you read the forgiveness application this is clear.

Overall though I’d expect 75-95% of program funds to be forgiven as they have extended the time window from 8 to 24 weeks making it much easier to use all funds in a forgivable way.

>It is not true that entire loan is forgiven if the payroll percent is met.

Where did I say that?

It says exactly what the parent said: loan funds must have been spent on legit essential expenses, 80% or more of which must be payroll.

I think this is a misunderstanding of the intention. The 80% means "we want you to spend this money on employee payroll, not a new boat" and they expressed that wish by saying "it needs to all be spent on payroll" , modified with "well, at least 80% on payroll and the balance on other essential non jetski expenses". So if the business spent 100% on payroll expenses that's just fine. It's the 79% and less they're worried about.

Why would they have be limited to an 8 week covered period? It is possible to elect that, but the PPP Flexibility Act extended the “covered period” with respect to loan forgiveness from the original '8 weeks after the loan is disbursed' to 'the earlier of 24 weeks after the loan is disbursed, or 12/31/20.'

I thought the period got extended to 24 weeks?

Is there actually a nail salon that took 5-10MM with only 14 employees? The guidance, at least initially, was to apply for 2 months of gross income and see what you get. You also had to supply supporting documentation.

I'd be shocked if someone somehow got something that egregious through.

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