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The Small Business Administration’s Paycheck Protection Program has been plagued by technical glitches and complaints of misallocated funds, but many experts say the biggest challenges may come when the loan forgiveness piece of the process begins.

The Treasury Department’s guidelines for PPP loan forgiveness specify that loan amounts will be forgiven as long as loan proceeds are used to cover payroll costs and to cover most mortgage interest, rent and utility costs over the eight-week period after the loan is made, and that employee and compensation levels are maintained.

Although this may sound simple, without formal guidance, many certified public accountants say that, without additional formal guidance, they are having a difficult time counseling clients on what to expect in the forgiveness phase of their loans. 

“From a practical perspective, it’s impossible to give guidance,” said Tony Nitti, CPA, a partner at RubinBrown in Denver, in a CNBC article Monday. “We are completely operating in the dark and some of these companies are almost halfway through their eight weeks already.”

Among the issues confusing lenders and businesses include concerns over how to compute a loan’s forgiveness amount, tracking allowable expenses and debt categorization, experts say. Another issue that’s still unclear is defining “full-time equivalent” employees and calculating the amount eligible for forgiveness, according to the American Institute of CPAs.

For senior living and care operators that have received a PPP loan, Tommy Brewer, managing director of specialty investment bank Ziegler, recommends several best practices for helping the loan forgiveness process go as smoothly as possible. First, he recommends that operators set up a dedicated bank account to track the use of PPP proceeds. If they’re unable to do that, then they should be sure to develop a clear system that confirms proceeds were spent on allowable expenditures.

In addition, he adds, operators should maintain clear documentation on allowable expenditures, including payroll reports and payroll tax filings, third-party invoices for utilities and rent, debt service schedules and bank statements.