On August 24, 2020, the SBA provided clarification that rent payments made to related parties can be included as a non-payroll expense, but the rules now provide insight into the potential significant limitations regarding the amount eligible for forgiveness. The rules have clarified that only mortgage interest owed by the related party landlord on the space being rented during the covered PPP period is eligible for potential forgiveness if both the lease and mortgage were entered into before February 15, 2020. The PPP loan borrower must provide its lender with the mortgage interest documentation from its related party landlord to verify these payments. If the landlord and the business have any ownership in common, they are deemed to be related parties. The SBA also clarifies that while rent or lease payments to a related party are eligible for forgiveness, if a borrower purchased property from a related party, mortgage interest payments made to the related party are not. This new guidance outlines an important consideration for businesses that hold property in a separate entity with common ownership and for acquisitive companies that often acquire a business and allow a seller to retain the real estate and an interest in the ongoing business.