NASHVILLE, TN (WSMV) - Wednesday, the U.S. Small Business Administration and the Department of Treasury made an announcement that could help small businesses still looking for financial assistance.
A revised version of the Paycheck Protection Program Forgiveness Application is making it easier for many borrowers.
It’s part of the PPP Flexibility Act of 2020 that was signed into law this month by President Donald Trump.
“One is an EZ form that makes it much easier for the PPP borrowers to apply for forgiveness. I would urge borrowers to work with their lenders on forgiveness, and their forgiveness application,” Deputy District Director Shawn McKeehan with the Small Business Administration said.
In addition to revising the full forgiveness application, SBA also published a new EZ version of the forgiveness application that applies to borrowers that:
Are self-employed and have no employees; OR
Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; OR
Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.
The EZ application requires fewer calculations and less documentation for eligible borrowers. Details regarding the applicability of these provisions are available in the instructions to the new EZ application form.
Both applications give borrowers the option of using the original 8-week covered period (if their loan was made before June 5, 2020) or an extended 24-week covered period. These changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan.
McKeehan says there’s no rush to get the application form back from the lender.
“The borrower, based upon the flexibility act, has ten months of their covered period to submit that forgiveness application,” McKeehan said.
McKeehan says all of this is to help small businesses in our nation continue to thrive.
“Now with the flexibility act, they only have to use 60 percent of this loan for their payroll as their min to get forgiveness. The other 40 percent fo the remaining balance of the loan could be used for rent, mortgage interest and utilities which will help them operate at this time,” McKeehan said.
The SBA says more guidelines will come out soon. Keep checking the US Treasury’s website.
Click here to view the EZ Forgiveness application.
Click here to view the Full Forgiveness application.