OTA Dispatch Issue 3, 2020

18 Oregon Trucking Associations, Inc. Oregon Truck Dispatch Covered Period Options for PPP Loan Borrowers By Kirk Faris, Senior Manager, Tax Services at Moss Adams LLP; Biagio Genualdi, Manager, Assurance Services at Moss Adams LLP; and Spike Welton, Senior Analyst, Valuations Services at Moss Adams LLP Pros and Cons THERE ARE A NUMBER of considerations for a borrower when selecting an eight- or 24-week covered period for their Payment Protection Program (PPP) loan. The PPP Flexibility Act (/articles/2020/06/paycheck- protection- program-flexibility-act), which was signed by President Donald Trump on June 5, 2020, extended the length in the covered period for qualified payroll and nonpayroll costs paid or incurred by borrowers from eight weeks to 24 weeks. It also allowed borrowers that received PPP loans before June 5 to elect to use the original eight-week covered period. The covered period was originally defined in Section 1106 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Borrowers, however, aren’t limited to submitting an application after the covered period of either eight or 24 weeks. Rather, as noted in the interim final rule originally published by the Small Business Administration (SBA) on June 22, the borrower is allowed to submit applications before the end of the 24-week covered period. Below are some of the benefits of each covered period to consider. EIGHT-WEEK COVERED PERIOD Borrowers that received a PPP loan prior to June 5 can elect to maintain an eight-week covered period. The major pros associated with this period follow. PROS Ability to Apply for Forgiveness Sooner Upon applying, the lender will have 60 days to review the application and submit its determination surrounding forgiveness to the SBA. The SBA will then have 90 days to confirm the portion of the PPP loan, if any, that’s forgiven. This timeline suggests a higher probability that a forgiveness determination by the lender and SBA will occur during calendar year 2020 and the legally released portion of the PPP loan being recognized in 2020 as income. Less Uncertainty Around Additional Guidance Changes Since the CARES Act was ruled into law, there have been weekly,