Good Morning Paycheck Protection Program Borrower,
On the evening of Monday 8/24, the SBA released additional guidance regarding the Paycheck Protection Program (PPP) and eligible use of funds specifically regarding non-payroll expenses. Due to these most recent changes, we are evaluating the impact and potential need to update our online portal, which may result in additional delays with the forgiveness application process.
Below is a brief summary of these most recent changes from the SBA:
  • Any amount attributable to the business operation of a tenant or sub-tenant of the PPP borrower may not be included in the loan forgiveness request under non-payroll costs with additional clarifications:
  • If a PPP borrower sublets a portion of their rented operating space then the requested forgiveness amount must be pro-rated to deduct the sub-leased amount.
  • In a similar manner for borrowers with sublet operating space, utility expenses must be pro-rated to deduct the sub-leased space.
  • When operating space is shared with another business, the borrower must pro-rate rent and utility payments in the same manner as the 2019 tax filings, or if a new business, the expected 2020 tax filings.
  • The portion of mortgage interest that is eligible for loan forgiveness is limited to the percent share of the fair market value of the space that is not leased out to the other businesses.
  • For home-based businesses regarding use of PPP funds for household expenses the guidance states that the borrower may include only the share of covered expenses that were deductible on the borrowers 2019 tax filings, or if a new business, the borrowers expected 2020 tax filings.
  • Rent payments to related parties are eligible for loan forgiveness using the following criteria:
  • The amount of loan forgiveness requested for rent or lease payments to the related party is not more than the amount of mortgage interest owed on the property during the covered period attributed to the rented space.
  • The lease and mortgage were entered into prior to February 15, 2020.
  • The borrower must submit a mortgage interest statement to substantiate payments.
  • Rent and lease payments to a related party may be eligible for forgiveness, however mortgage interest payments to a related party are not eligible for forgiveness.
  • Owner-employees with less than a 5% ownership stake in a C- or S-Corporation are exempt from the owner-employee compensation rule when determining the amount of their compensation that is eligible for forgiveness.
Our Loan Officers are here to assist you in navigating the forgiveness application process. Please feel free to reach out to the assigned officer in your county for additional information and explanation of the above changes and how it may impact your submission.
Warm Regards,

Robert A. Vernick
Senior Vice President
Chief Lending & Bus. Dev. Officer
NMLS# 977437
The Farmers National Bank of Emlenton
612 Main Street
Emlenton, PA 16373
p: 844.882.6436
c: 724.991.9047
f: 724.867.9326