- SBA and Treasury: New EZ and Revised Forgiveness Applications for the Paycheck Protection Program
The Small Business Administration (SBA), in consultation with the Department of the Treasury, posted a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application implementing the Paycheck Protection Program Flexibility Act of 2020 (PPP Flexibility Act) enacted on June 5, 2020. In addition to revising the full PPP loan forgiveness application, SBA also published a new “EZ version” of the forgiveness application that applies to borrowers that:
(i) are self-employed and have no employees;
(ii) 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
(iii) 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%.
Both applications give borrowers seeking PPP loan forgiveness 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 authorized in the PPP Flexibility Act.
2. SBA Issues a New Interim Final Rule Revising the Third and Sixth Interim Final Rules on the Paycheck Protection Program
The Small Business Administration issued a new Interim Final Rule for the Paycheck Protection Program (PPP), revising key provisions of its April 14, 2020 and April 28, 2020 Interim Final Rules to conform to the Paycheck Protection Program Flexibility Act of 2020. The new Interim Final Rule:
(i) amends the covered period for PPP loans;
(ii) revises the loan maturity date for PPP loans made on or after June 5, 2020;
(iii) clarifies that for purposes of determining the percentage of use of loan proceeds for payroll costs (but not for forgiveness purposes), the amount of any refinanced Economic Injury Disaster Loan will be included; and
(v) clarifies the amount of the PPP loan eligible for forgiveness.