Clarification on PPP rule for laid off employees who decline to be rehired

One of the questions many franchisees have about the Paycheck Protection Program is whether the forgiveness amount will be reduced if you offer to rehire an employee that you laid off, but the employee declines the offer?

The answer is “no, you will not be penalized.”

The SBA and Treasury intend to issue an interim final rule excluding laid-off employees whom the borrower offered to rehire (for the same salary/wages and same number of hours) from the CARES Act’s loan forgiveness reduction calculation.

Please note that the interim final rule will specify that to qualify for this exception you must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented. In addition, employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation.

Round 2 of Paycheck Protection Program approved. What you need to do.

Round 2 of the Paycheck Protection Program (PPP) has been approved by Congress and signed by President Trump, providing another $310 billion in funding for small businesses.

Reports from various news sources, however, predict that all $310 billion will be needed for those businesses already in que from the first round that did not receive funding.

And even the new round of funding may not be enough to meet the demand that already exists.

What does this mean for you?

  • If you submitted your PPL application for Round 1 but were not approved prior to funding running out, you should not have to reapply. It is important though that you contact your financial institution to confirm that they have your information ready to submit for this new round of funding.
  • You should remain in constant contact with your financial institution to confirm the status of your application. Many banks, especially larger ones, did not keep their customers updated on status of their applications during Round 1, so it is important for you to be proactive in doing so.
  • If you did not submit an application for Round 1, it is still possible to apply, but understand that you will likely be behind those already in line.
  • If you have not applied yet, you need to immediately download the form and pull all the necessary information. You will need to apply through an approved SBA lender and most financial institutions will only accept applications from existing business customers.


Conclusions drawn from $349 billion PPP SBA loan program has released an analysis of the Paycheck Protection Program. Among their findings:
Businesses with over 200 employees were over 4 times more likely to have their loan processed and approved than small companies with 15 or fewer employees.

Not only did banks prioritize their customers over non-customers, they also put their bigger customers ahead of their smaller ones.

Rural states (e.g., Nebraska, North Dakota, and Kansas) had a much higher PPP coverage ratios than urban states (e.g., New York, California, and New Jersey).


Paycheck Protection Program hits its funding limit. Here’s what you should know.

The SBA has announced that it is unable to accept new applications for the paycheck Protection Program (PPP) because available appropriations have hit the $349 Billion limit. However, those who have applied and are working through your process/documentation requirements PLEASE stay focused on finishing and securing your loan.

The important question to ask your bank or SBA approved lender is to confirm that your application was entered into the SBA’s ETRAN system. If you are in the system, your application is already counted within the available appropriations and you simply need to finish the process including signing loan documents.

Lessons learned from preparing and submitting PPP applications this weekend

Here are four Lessons learned from preparing and submitting PPP this weekend:

1.) Have your 2019 IRS 941’s at hand to send/upload, as almost all banks are requiring it,

2.) Don’t get frustrated, and please keep at it! Some bank portals are struggling to keep up with volume and even banks (Wells Fargo) have reached their limits. Between Wells Fargo and BOA as of this morning, almost $50B (14% of the original $350B) is already in process – so please make time.

3.) Even if you don’t have everything ready/perfect, get the base application submitted as almost all banks will have some back and forth / next steps,

4.) Understand the banks don’t have all the answers, they are learning real-time like us. They are however focused on helping, because we (the “Borrowers”) are effectively acknowledging to hold harmless your bank from any accountability on your submission and/or your PPP calculations. They are just “processing” and supporting the SBA processes in line with federal guidelines.

Breaking Update On Bank of America

For franchisees who are Bank of America customers or considering processing your PPP application through BOA, this has been communicated:

1. You must have a pre-existing business lending and business deposit relationship with Bank of America, as of February 15, 2020. A Bank of America Business, corporate or commercial credit Credit Card, line of credit or loan may be the lending product used.

2. At Bank of America, the federal Paycheck Protection Program will be administered online only.

3. Clients must have a Business Online Banking account. If you do not currently have a Business Online Banking account, you must sign up for one as soon as possible.

4. Apply for the federal Paycheck Protection Program at beginning on Friday, April 3.

5. After completing the application process, you will receive online confirmation of the submission. Bank of America will process your application as soon as possible.

6. Bank of America will contact you with next steps and to collect any required documents. Do not proactively deliver or send documents to our Financial Centers or banking teams.

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