written statement explaining the reason the applicant believes it qualifies for the affiliation exception. affiliation rules are waived for businesses in the hotel and food services industries, franchises in the small business administration's franchise directory, and businesses that receive financial assistance from small business investment companies licensed by the small business administration. count all employees regardless of work location. a business that is in either the accommodation or food services industries and has more than one physical location, however, qualifies if it employs fewer than 500 per location. a business that received applied for a ppp loan before may 5 will not be subject to penalties for interpreting the 500-employee threshold for only counting its employees in the united states. businesses that receive ppp loans on or after may 5 must count all employees worldwide for purposes of the 500-employee threshold. colleges and universities do not need to count student workers if the student works as part of either a federal work-study program or a substantially similar program of a state or municipality. 26 cfr 1.121-1(b)(2) may be used to determine an employee's primary place of residence. number of employees is determined by counting all paid employees, whether employed on a full-time, part-time, or seasonal basis; leased from a temporary employee agency or a professional employer organization. count all paid employees as whole employees. volunteers who receive no pay for their services are excluded from the number of employees. the average number of employees is equal to the average of the number of employees for each payroll between january 1, 2019, and december 31, 2019. if the applicant began its operations after january 1, 2019, it averages the number of employees in each pay period that it operated between january 1, 2019, and december 31, 2019. small business revenue standards are not used for qualification of ppp loans. tangible net worth equals total assets, less intangible assets, less liabilities. such as selling medical marijuana five years in the case of fraud, bribery, embezzlement, a false statement on a loan application, or a false statement on an application for federal assistance. in the case of entities that are exempt from the affiliation rules, each affiliate may apply and receive a separate ppp loan, each of which may be up to $10 million. payroll costs exclude emergency paid sick leave and emergency paid family leave under the families first coronavirus response act. workers who are u.s. permanent residents count as having their primary residence in the united states. workers with a non-immigrant status, such as j-1 or h-2a, do not count as having their primary residence in the united states. a fishing boat owner's payroll costs are allowed to include payments to each crewmember whose compensation is reported in box 5 of form 1099-misc, as long as the crewmember does not receive a ppp loan in their own right. an applicant may choose to use its payroll costs for the previous 12 calendar months instead. businesses not in business on february 15, 2019, may use the period from january 1, 2020, to february 29, 2020. seasonal businesses may choose to use the period from february 15, 2019, to june 30, 2019; or from march 1, 2019, to june 30, 2019; or from may 1, 2019, to september 15, 2019. a borrower must not request ppp loan forgiveness for excess loan proceeds. if the error was discovered before sending the ppp forgiveness application to the small business administration, the lender needs to tell the small business administration that it should deny forgiveness for the excess amount. if the ppp loan forgiveness application was already sent to the small business administration, the lender must request its withdrawal through the paycheck protection platform, correct the error, and then resend. if the small business administration has already approved ppp loan forgiveness and has sent payment to the lender, the lender must notify both the borrower and the small business administration through the sba paycheck protection platform. the equal credit opportunity act's 30-day requirement applies only if the applicant is a business with gross revenues of $1 million or less in its preceding fiscal year. otherwise, the lender must notify the applicant in a reasonable period of time. the limit is $15,385 per employee if using an 8-week covered period. generally, net self-employment profit in 2019 is the amount on the person's form 1040 schedule c line 31 for 2019. the maximum is $15,385 if using an 8-week covered period. mortgage interest payments are allowable and are eligible for forgiveness if the business mortgage was obligated prior to february 15, 2020. mortgage interest payments to a related party are not eligible for forgiveness. related parties are any two entities with any ownership in common. if the business operates from an owned building on which it has a mortgage, mortgage interest is forgiveable up to the proportionate share of the fair-market value of the space that is not leased to other businesses. mortgage principal payments are not allowable. interest payments are allowable if the business loan was first made prior to february 15, 2020. rent payments are allowable if the business lease was first obligated prior to february 15, 2020. rent paid to a related party is allowable if the business lease was first obligated prior to february 15, 2020. allowable rent paid to a related party is eligible for forgiveness up to the amount of mortgage interest the related party owed on the property during the covered period that is attributable to the rented property. related parties are any two entities with any ownership in common. utilities are allowable if service began prior to february 15, 2020. if the business operates from an owned building, utilities are forgiveable up to the proportionate share of the utilities of the space that is not leased to other businesses. for a home-based business, rent, interest, and utilities are forgiveable up to the prorated share of covered expenses that were deductible on the business's tax return in 2019. a business that began in 2020 may use the amount expected to be deductible on the business's tax return in 2020. applying for loan forgiveness before the end of the covered period does not necessarily change the covered period. the 24-week period cannot end any later than march 31, 2021. instead of a 24-week period, a business may use any period length of at least 8 weeks and no more than 24 weeks long. any former employee who is rehired by april 27, 2020, counts as being employed the entire eight weeks. alternatively, a business that pays biweekly or more frequently may choose to begin the period on the first day of the first pay period after the day the loan proceeds were disbursed. alternatively, the business may choose to divide by the average number of ftes per month between january 1, 2020, and february 29, 2020. a seasonal business divides by the average number of ftes per month between february 15, 2019, and on june 30, 2019. wages, salaries, bonuses, vacation leave, sick leave, hazard pay, wages paid to furloughed employees, health benefits, group life insurance benefits, disability insurance benefits, retirement benefits are included in the definition of eligible payroll costs. advance payments of mortgage interest are ineligible for loan forgiveness. rent includes lease payments for real property (such as office space) and lease payments for personal property (such as equipment). if the ppp loan was made before june 5, the business may choose to use an eight-week period instead. a business that pays biweekly or more frequently may choose to use an alternative payroll covered period for payroll costs instead. the alternative payroll covered period begins on the first day of the first pay period beginning after the date the loan proceeds were received. the alternative payroll covered period does not apply to non-payroll costs. payroll costs are considered to be incurred on the day the employee's pay is earned, which is generally the day the employee worked. if an employee is paid but not performing work, payroll costs are incurred based on the business's schedule, which is generally each day the employee would have ordinarily performed work. in order for a non-payroll cost to be eligible for loan forgiveness, the non-payroll cost must either be paid during the covered period or incurred during the period and paid by the next regular billing date, which is allowed to be after the covered period ends. any non-payroll costs that are partially incurred during the covered period may be included in loan forgiveness only for the portion incurred during the covered period and paid by the next regular billing date. a business that received a ppp loan of $50,000 or less is not required to reduce ppp loan forgivess due to reductions in full-time-equivalent employees or reductions in employees' salaries or wages. a business may disregard wage reductions to any employee who received wages exceeding $100,000 annualized during any single pay period in 2019. a business may also disregard wage reductions if it eliminated the wage reduction by june 30, 2020. a reduction in the employee's health insurance costs or retirement plan contributions do not cause any reduction in loan forgiveness. in these cases, the business must document these situations in writing and inform the applicable state unemployment insurance office within 30 days of the individual's rejection of the offer of employment, or else the exception does not apply. all businesses may use sba form 3508. a business is eligible to use sba form 3508s instead if it meets all of the following criteria. the business received a ppp loan of $150,000 or less; the dollar amount for which forgiveness is requested does not exceed the principal amount of the ppp loan; the ppp loan proceeds were used to pay costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest payments; business rent or lease payments; or business utility payments); at least 60% of the forgiveness amount was used for payroll costs; if the business used a 24-week covered period, the forgiveness amount does not exceed 2.5 months' worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $20,833 per worker; and if the business used an 8-week covered period, the forgiveness amount does not exceed 8 weeks' worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $15,385 per worker. a businesses is eligible to use sba form 3508-ez instead if it meets any of the following three criteria. it is a self-employed individual, an independent contractor, or a sole proprietor without any employees at the time it applied for the ppp loan; or it is an employer that did not reduce its number of full-time-equivalent employees (othjer than employees it was unable to rehire and unable to replace with similarly qualified employees), and it did not make a reduction of more than 25% to the pay of any employees who earned less than $100,000 annualized; or it is an employer that did not make a reduction of more than 25% to the pay of any employees who earned $100,000 annualized, and it was unable to operate at the same level as it had on february 15, 2020, because of covid-19 health and safety restrictions imposed by federal agencies. this is true even if the borrower requested no forgiveness at all of the loan. lenders receive payment on approved ppp loans based on the amount of the loan. payment is 5 percent of loans of up to $350,000; 3 percent of loans of between $350,001 and $1,999,999; and 1% of loans between $2,000,000 and $10,000,000. payment is disbursed to the bank within five days that the lender disbursed the loan proceeds to the business. in the case of perishable goods, the contract must have been in effect either before or during the loan period.