Banks and borrowers alike are eagerly awaiting overdue regulatory guidance on loan forgiveness in the Paycheck Protection Program.

The loan program, overseen by the Small Business Administration, requires banks to make the initial determination on whether borrowers have met the loan forgiveness requirements in the emergency small business loan program. The authorizing law stipulates borrowers can request forgiveness if at least 75% of the funds are used on payroll over an eight-week period.

But borrowers and lenders are still in need of more granular guidance on which costs, precisely, qualify for forgiveness. For borrowers who already received loans and put the money to work, the eight-week clock is ticking and there are unresolved questions, such as what documentation is required or how to calculate forgiveness portions for borrowers who do not meet the 75% threshold.

"Companies are making good-faith efforts to comply, but they don't know what's required of them," said Robert Klingler, a partner at Bryan Cave Leighton Paisner. "We need these regulations, or the program as a whole just becomes less successful."

Klingler said without clear guidance, the program's success will be hampered because companies will either fail to spend money that would have been forgiven or policymakers will have to allow expenses they did not intend to be forgivable.

Atlantic Union Bankshares Corp. has started drawing up a forgiveness application despite not having full clarity on the bank's obligations. CEO John Asbury said the bank expects significant work similar in nature to the crush of applications when the PPP launched. He expects some requirement on the bank's part to verify that businesses appropriately spent the loan funds, and the bank has started work on processes.

"You can't wait because otherwise you will set up yet another crisis," Asbury said in an interview. "We are working hard now to get ahead of that so that we are well prepared when that tsunami of forgiveness requests comes in. And it's coming."

Clarity in the form of regulatory guidance was supposed to be here by now. The law that created the PPP stipulated that regulators should issue forgiveness guidance within 30 days after enactment. President Donald Trump signed the bill into law on March 27, meaning the regulatory guidance should have been issued before the end of April.

"It's not unusual for a regulator to miss its statutory deadline for filing regulations, but this isn't Dodd Frank [Act] where you can adopt regulations two years later and still make progress. In two years, this will be done," Klingler said in an interview.

Heartland Financial USA Inc. CEO and President Bruce Lee said he expects substantial work will be required of banks to process forgiveness requests. While the law makes clear that banks are supposed to review documents, the level of review required and how to interpret parts of the legislation are unclear. For example, loan forgiveness hinges on the borrower's average number of full-time equivalent employees, but the law does not define what qualifies as a full-time equivalent employee.

"This isn't just sort of one-and-done, at all," said Lee, referring to processing loan applications as the first step. "There are several layers that will be ongoing."

READ MORE: Sign up for our weekly coronavirus newsletter here, and read our latest coverage on the crisis here.