It has been a little time since we last reached out to you with an update on the Paycheck Protection Program. We wanted to share two updates with you that you may or may not have heard about:
Simplified Forgiveness Application for Smaller Loans
On October 9th, the Small Business Administration ("SBA") and US Treasury announced a new, simpler loan forgiveness application and process for PPP recipients of loans for $50,000 or less.
For eligible borrowers, the new application allows for fewer calculations and less documentation. These borrowers are exempt from reductions in loan forgiveness amounts based on FTE and salary and wage reductions. And, while the SBA may still request certain documentation in their loan review process, the new application doesn’t require borrowers to show the calculations used to determine their loan forgiveness amount.
PPP Forgiveness Application Guidelines
On October 13th, the SBA issued guidance which provides that PPP borrowers may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from date of loan origination.
Keep in mind that loan payments commence 10 months after the borrower’s covered period ends. To avoid making loan payments on potentially forgivable amounts, you must submit the loan forgiveness application within that 10-month period.
The SBA also addressed the October 31, 2020 expiration date on the loan forgiveness applications. It explained this date merely represents a temporary expiration date in compliance with the Paperwork Reduction Act and not the deadline for the forms to be submitted.
We hope you found the above helpful. And again, we are available if you have questions, concerns or need assistance.
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