The SBA and Treasury Department today announced the release of two Paycheck Protection Program (PPP) loan forgiveness applications—one revised and one new—which are intended to streamline the loan forgiveness process. Both application forms are intended to be consistent with the recent changes made to PPP by Congress, as signed by President Trump on June 5, 2020, and described here.
The forms also respond to complaints that the initial PPP loan forgiveness application form issued on May 15, 2020 was cumbersome, raised unanswered questions, and was difficult to accurately complete. The initial application form is discussed here.
The revised PPP loan forgiveness application form, which can be found here, at five-pages long, is less than half as long as the initial 11-page application form.
The new PPP loan forgiveness application form, a three-page “EZ” application, found here, may be used if the borrower:
• Is a self-employed individual, an independent contractor, or a sole proprietor and had no employees at the time of the PPP loan application; or
• Did not reduce the annual salary or hourly wages of any employee by more than 25% and did not reduce the number of employees or the average paid hours of employees (excluding reductions that arose from an inability to rehire); or
• Did not reduce the annual salary or hourly wages of any employee by more than 25% and experienced reductions in business activity due to compliance with requirements or established guidance related to COVID-19.
Both applications allow borrowers to elect the original 8-week covered period for PPP loans made before June 5, 2020, or the extended 24-week covered period.
From the beginning of the PPP loan process under the CARES Act, the Act and SBA’s PPP guidelines have undergone several revisions, all aimed at clarifying PPP loan requirements and easing processes. These changes, and other legal effects of COVID-19 on businesses and individuals, are discussed on FOS’s COVID-19 webpage, located here.
Even with these “streamlined” applications, questions will certainly remain for borrowers working their way through the PPP loan forgiveness process. Borrowers should continue to consult with their FOS attorneys, tax accountants, financial advisors and lenders regarding their PPP loan forgiveness application and required documentation. If you have any questions regarding the PPP, PPP loan forgiveness, the PPP loan forgiveness applications or any other legal matter, please contact your FOS attorney.