On June 17, 2020, the U.S. Small Business Administration posted a revised Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act of 2020, signed into law by President Trump on June 5, 2020. In addition to revising the full forgiveness application, SBA also published a new EZ version of the forgiveness application, applying 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. 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.
The Bank is currently in the process of converting the SBA forgiveness application into an electronic format we believe should be much easier for you to work with. We will notify you when the bank’s application for forgiveness is ready to use, which we hope will be by early July. We respectfully request that you wait until that time to submit your application for forgiveness. Borrowers should not be concerned by this slight delay, as the PPP Flexibility Act has significantly extended the period of payment deferment on all PPP loans.
Should you have any questions, feel free to contact us. You can also visit the SBA website to preview the forgiveness application forms and instructions, and to become familiar with their latest guidance.