Treasury Dept. Releases New, Streamlined PPP Loan Forgiveness Applications

By:
Chris Gaetano
Published Date:
Jun 18, 2020
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The Treasury Department announced the release of a new application to apply for Paycheck Protection Program (PPP) loan forgiveness, which it said makes the process more "borrower-friendly," as it accounts for recent changes in the terms of the program that were recently signed into law.

The new law extended the eight-week window for using PPP loans to 24 weeks, giving small businesses more time to use the money and still have their loans forgiven. It also extended the deadline to rehire workers until Dec. 31; reduced the amount that must specifically be used on payroll  from 75 to 60 percent (although now this 60 percent is a cliff rather than a tapering-off point); gave borrowers five years instead of two to pay back unforgiven debt; and allowed businesses to defer payroll tax.

Furthermore, it allows certain exemptions to the employee-retention requirement. Borrowers would not be penalized if they could, in good faith, document an inability to rehire individuals who had been let go or hire new qualified employees, or document an inability to return to the same level of business activity as before due to compliance with the requirements established by health authorities.

The Treasury Department further said that there will be a new EZ form, which requires even less documentation and fewer calculations. This new application can be used by those who:

  • * Are self-employed and have no employees; or
  • * Did not reduce the salaries or wages of their employees by more than 25 percent, 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 perent.

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