June 17, 2020
By Caity Witucki
Contributing Editor, C-Suite Wednesday
C-Suite Wednesday – SBA Issues New PPP Forgiveness Forms and Interim Final Rule
Today, the U.S. Small Business Administration, in consultation with the U.S. Department of the Treasury, posted its 19th Interim Final Rule (IFR) regarding the Paycheck Protection Program (PPP). The IFR is scheduled to be published in the Federal Register on Friday, June 19th. In addition to the IFR, the SBA also published a revised, user-friendly Paycheck Protection Program loan forgiveness application and a parallel “EZ” version implementing the PPP Flexibility Act of 2020.
The “EZ” version of the forgiveness application may be used for borrowers who:
- 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%
“This is great news for small businesses,” says SBA Regional Administrator Steve Bulger, who oversees agency operations in the Atlantic and Mid-Atlantic regions. “The EZ application requires fewer calculations and less documentation, which makes the process much less intimidating. I’m sure this will go a long way toward improving access and helping us distribute the remaining PPP appropriations to support small business owners and their employees.”
The provision in the IFR related to the new 5-year maturity date is effective June 5, 2020. The remaining provisions regarding the portion of the loan proceeds that must be used for payroll (now 60%) and the extended covered period (now 24 weeks) will be effective on June 19, 2020. Borrowers who received a loan prior to June 5, 2020, may use the new maturity date and coverage period if it is agreed upon by both the lender and the borrower.
Unfortunately, SBA lenders cannot breathe a sigh of relief quite yet. Lenders are still waiting for more detail on how to submit the application. The SBA and Treasury are expected to provide this guidance through SBA notices which will be posted on the SBA’s website.