Loans are subject to forgiveness for businesses that retain or rehire laid-off employees and maintain salary levels. The SBA will forgive the portion of the loan proceeds that are used to cover the 8 weeks following the date of loan origination of payroll costs, rent, utilities and mortgage interest. No more than 25% of the forgiven amount may be for non-payroll costs. The loans are 100% federally guaranteed under a new subsection of Section 7(a) of the Small Business Act.
The SBA provides more details on the PPP and loan forgiveness in its Interim Final Rules, including details on the calculation for loan size and what is considered payroll costs. The Interim Final Rule is here.