The Treasury Department last week announced that the Small Business Administration is making it easier to request Paycheck Protection Program (PPP) loan forgiveness for loans that are $50,000 or less.
What is the Paycheck Protection Program?
The Paycheck Protection Program was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 to help businesses keep employees on the payroll amid state-wide shutdowns, occupancy restrictions, reduced customer foot traffic, and other hardships arising from the pandemic. While the SBA stopped accepting applications for new PPP loans in August, businesses can still request loan forgiveness.
“The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven loan must have been used for payroll),” the SBA explains on its “Paycheck Protection Program” webpage. If a business doesn’t keep (or rehire) employees at their current salary levels for the period prescribed by the program, the amount forgiven will be reduced.
According to the Treasury release, small businesses with a loan totaling $50,000 or less can use the new, simpler application to request loan forgiveness.
Where can I find the simpler PPP loan forgiveness application?
Treasury includes links to the new form, its instructions, and an Interim Final Rule:
- Simpler loan forgiveness application
- Instructions for simpler loan forgiveness application
- Interim Final Rule for simpler forgiveness application
In addition to helping businesses more easily apply for loan forgiveness, Treasury says, “SBA and Treasury have also eased the burden on PPP lenders, allowing lenders to process forgiveness more swiftly.”