On June 17, the Small Business Administration published a revised PPP loan forgiveness application and introduced the new “EZ PPP Loan Forgiveness Application.” Links to both applications and their instructions can be found at the bottom of this page and on our Resources archive.
What’s in the Revised PPP Forgiveness Application
The revised forgiveness application includes the following items:
1. Safe harbor information for those borrowers who are not able to maintain the same number of full-time equivalent employees or borrowers whose business activity level was diminished by some other regulatory requirement.
2. A choice between the original 8-week forgiveness period or the revised 24-week forgiveness period.
3. Updated calculations for health insurance costs and retirement costs for owners of S corporations (health insurance costs are eligible, whereas retirement costs are not).
When to Use the EZ PPP Loan Forgiveness Application
The EZ PPP Loan Forgiveness Application applies to borrowers who:
1. Are self-employed and have no employees; or
2. Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number of hours of their employees; or
3. Experienced reductions in business activity because of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%
The SBA noted that “the EZ application requires fewer calculations and less documentation for eligible borrowers,” which will hopefully create a streamlined, less time-intensive experience.
Amended PPP Forgiveness Requirements
As a reminder from our previous article on the amended PPP forgiveness requirements, the updated version of the program allows for the following:
1. The loan forgiveness period has been extended from 8 weeks to 24 weeks.
2. The 75% payroll requirement has been reduced to 60%.
3. Safe harbors now provide some grace for some borrowers who were not able to maintain the same number of full-time equivalent employees or borrowers whose business activity level was diminished by some other regulatory requirement.