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New “EZ” PPP Loan Forgiveness Application Available

New EZ PPP Loan Forgiveness Application Available

In an effort to encourage more businesses to sign up and to alleviate concerns about being able to get the loans forgiven for businesses like restaurants that haven’t been able to open to customers, Congress provided more flexibility by passing the Paycheck Protection Program Forgiveness Act earlier this month. It extends the covered period (the period during which borrowers are required to spend their PPP loan funds) from eight weeks to 24 weeks. It also amends the requirement that no more than 25% of the loan forgiveness amount be spent non-payroll costs (such as rent, loan interest, utilities, etc.) and allows up to 40% to be used for non-payroll costs. The bill also included several other changes, such as extending the deferral of payments of loan principal, interest and fees, from the current six months, until the date when the SBA pays the forgiveness amount to the lender.

The SBA has published a new loan forgiveness application that reflects these changes. Along with revising the full forgiveness application, the SBA is also introducing a new EZ version of the forgiveness application that 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 didn’t reduce the number or hours of their employees; or

  3. 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 to be done and less documentation is needed for eligible borrowers. Details about the applicability of the various provisions are available in the instructions accompanying the new EZ application form. Both applications give borrowers the option of using the original eight-week covered period (if their loan was made before June 5, 2020) or the extended 24-week covered period provided under the new law. The SBA and US Treasury said the changes would result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan.


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