The SBA and Treasury Department announced a simplified loan forgiveness application for PPP loans of $50,000 or less.  

Please note the following documents are required to be submitted to your lender with Form 3508S:

Payroll: Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following:

• Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees
• Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the covered period or the alternative payroll covered period, that include a) Payroll tax filings reported, or that will be reported, to the IRS (typically Form 941) and b) State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state
• Payment receipts, canceled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the Borrower included in the forgiveness amount.

Nonpayroll: Documentation verifying existence of the obligations /services prior to February 15, 2020, and eligible payments from the Covered Period

• Business mortgage interest payments: Copy of lender amortization schedule and receipts or canceled checks verifying eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments
• Business rent or lease payments: Copy of current lease agreement and receipts or canceled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments
• Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, canceled checks, or account statements verifying those eligible payments.

Learn more about this guidance and the applicable forms by clicking here.

Under the Paycheck Protection Program Flexibility Act of 2020, which went into effect on June 5, 2020, the payment deferral period was extended from six months to 12-16 months.  The 12-16 month length of the deferral period will depend on if you are utilizing the original eight-week Covered Period or the extended 24-week Covered Period to exhaust your PPP funds.  Borrowers with loans dated after June 5, 2020, will automatically have a 24 week Covered Period.  Borrowers with loans dated prior to June 5, 2020, have the choice between an eight-week Covered Period or a 24-week Covered Period.  Please note - If a borrower submits its loan forgiveness application within ten months of the completion of the Covered Period, the borrower is not required to make any payments until the forgiveness amount is remitted to the lender by SBA. 

March 2, 2021 Update:  The SBA has announced that it will release new forgiveness forms on March 5, 2021.  We will upload the new forgiveness forms once they are released by SBA.  Please note that any third-round borrowers who have already submitted forgiveness applications will have to resubmit on the new form once it is available.  

 

Interim Final Rule on Loan Forgiveness Requirements and Loan Review Procedures as Amended by Economic Aid Act - Released January 19, 2021

 

• PPP loans have an interest rate of 1%
• Loans issued prior to June have a maturity of two years.  Loans issued after June 5 have a maturity date of five years.
• Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower's loan forgiveness amount to the lender.  If a borrower does not apply for loan forgiveness, payments are deferred ten months after the end of the covered period for the borrower's loan forgiveness (either eight weeks or 24 weeks). 
• No collateral or personal guarantees are required 

The SBA, in consultation with the Department of the Treasury, released an interim final rule to reflect changes made by H.R. 7010, the Paycheck Protection Program Flexibility Act, which was signed into law by President Trump on June 5, 2020.  Along with this interim final rule, a revised, borrower-friendly PPP loan forgiveness application was also released.

The key highlights of the PPP Flexibility Act are:

• Extended the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness.  Borrowers who have already received PPP loans retain the option to use an eight-week covered period.  
• Lower the requirements that 75% of a borrower's loan proceeds must be used for payroll costs and that 75% of the loan forgiveness amount must have been spent on payroll costs during the 24-week loan forgiveness covered period to 60% for each of these requirements. If a borrower uses less than 60% of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60% of the loan forgiveness amount having been used for payroll costs. 
• Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with requirements for guidance issued between March 1, 2020, and December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to worker or customer safety requirements related to COVID-19. 
• Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020. 
• Increase to five years the maturity of PPP Loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020, and provides an option for loans made prior to that date to extend maturity from two years to five years at the mutual agreement of the borrower and lender. 
• Clarifies that if a borrower submits its forgiveness application within 10 months of the end of the loan forgiveness period, the borrower will not have to make any payments on the loan before the date SBA remits the forgiven amount to the lender. 
• Confirms that June 30, 2020, will remain the last date on which a PPP loan application can be approved. 

In addition to revising the full forgiveness application, SBA also published a new EZ version of the forgiveness application that applies to borrowers that:

• Are self-employed, an independent contractor or a sole proprietor with no employees: OR
• 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 (excepting laid-off employees who refused an offer to return); 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.  Details regarding the applicability of these provisions are available in the instructions to the new EZ application form.  SBA also updated the regular Form 2508 to reflect recent changes made by Congress in the PPP Flexibility Act and issued a new interim final rule that implements changes made by the PPPFA. 

The SBA, in consultation with the Department of the Treasury, released an interim final rule to reflect changes made by H.R. 7010, the Paycheck Protection Program Flexibility Act, which was signed into law by President Trump on June 5, 2020.  Along with this interim final rule, a revised, borrower-friendly PPP loan forgiveness application was also released. 

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn.  Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses.  These loans may be forgiven if borrowers maintain their payrolls during the crisis and restore their payroll afterward.   

• A small business with fewer than 500 employees
• A small business that otherwise meets the SBA’s size standard
• A 501(c)(3) with fewer than 500 employees
• An individual who operates as a sole proprietor
• An individual who operates as an independent contractor
• An individual who is self-employed who regularly carries on any trade or business
• A Tribal business concern that meets the SBA size standard
• A 501(c)(19) Veterans Organization that meets the SBA size standard   

The SBA reopened applications for PPP funding on Friday, January 15, 2021.  Please note that applications will be updated here as we receive guidance from the SBA.  

To clarify which program you would be eligible for:
First Draw Borrowers are individuals who didn't receive a PPP loan in the first two rounds

First Draw Borrowers Application

 

Second Draw Borrowers are "borrowers that previously received a PPP loan under section 7(a)(36) of the Small Business Act ("First Draw PPP Loans") and have used or will use the full amount of the initial PPP loan for authorized purposes on or before the expected date of disbursement of the Second Draw PPP Loan"

 Second Draw Borrowers Application