The Small Business Association (SBA) recently announced that on August 10, 2020, the SBA will start accepting PPP Forgiveness Applications and the necessary supporting documentation. Furthermore, the SBA has now provided lenders with the procedures and a client portal—called the PPP Forgiveness Platform—to submit the completed PPP Forgiveness application package. This will allow banks across the country to secure the funds necessary for a PPP loan after a lender verifies the application and supporting documentation to determine the forgiveness amount.
Specific Guidelines
August 8th, the last day for the SBA to accept Paycheck Protection Program (PPP) Loan Applications is quickly approaching. However, the August 10th date allows lenders to begin submitting decisions on borrower loan forgiveness applications, requesting payment of the forgiveness amount determined by the Lender, and managing SBA correspondence and reviews through the SBA’s newly created portal.
Below is the list of extended programs available to small businesses:
1. The eight-week Covered Period of your PPP Loan has been extended to 24 weeks,
2. An Alternative Payroll Covered Period has been established for borrowers with a bi-weekly (or more frequent) payroll schedule, and
3. The minimum amount of PPP loan proceeds that must be spent on Payroll has been reduced from 75% to 60%.
The first three changes are will help to increase the forgivable portion of your PPP loan. For more information regarding these changes, you can check out the SBA’s summary here.
4. The SBA has revised the PPP Forgiveness Application and has also released a new “EZ” version of the Forgiveness Application. You may use the EZ version, which requires fewer calculations and documentation if you did not reduce employees’ wages by more than 25%, and did not reduce work hours of their employees. The intent, again, is to make it easier for businesses to achieve full forgiveness of their PPP loans. To access the new applications and instructions, please use the following links.
– New PPP EZ Forgiveness Application SBA Form 3508EZ.
– To access the instructions for the SBA Form 3508EZ.
– Revised PPP Loan Forgiveness Application SBA Form 3508.
– To access the instructions for the SBA Form 3508.
5. Finally, you should review the following guidance from the SBA entitled “Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review Procedures Interim Final Rule”. We encourage you to review the information immediately so you can fully understand information on topics such as; Borrower and Lender responsibilities, Deferral Period and Forgiveness, Payroll Costs Eligible for Loan Forgiveness, Reductions to Loan Forgiveness, and other information necessary to properly complete the loan forgiveness process.
Contact our DC Law Office for More Information
Finally, for more information on PPP loan forgiveness, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys or check out our blog.