As many business owners are well aware, the Paycheck Protection Program (PPP) rules and guidelines regarding loan forgiveness are complex and carry a high compliance burden. In order to obtain PPP loan forgiveness, borrowers are required to complete a rather complicated forgiveness application that is then reviewed by the borrower’s lender.
In response to comments from business owners and professionals, today, June 17, 2020, the U.S. Small Business Administration (SBA), posted a revised, more borrower-friendly PPP loan forgiveness application that implements the new rules of the PPP Flexibility Act of 2020. In addition to revising the full forgiveness application, the 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. These changes are expected to provide borrowers with a more efficient process and make it easier for borrowers to realize full forgiveness of their PPP loan.
FLB’s attorneys have extensive experience in all matters relating to PPP and the CARES Act. We can provide guidance to businesses and business owners faced with these issues brought about by the COVID-19 pandemic, including loan forgiveness.