The Small Business Administration last week issued a new Interim Final Rule on PPP loan forgiveness and provided two new Loan Forgiveness Applications. For the most part, these new publications implement the changes made by the PPP Flexibility Act.
Company can use the EZ form if they meet one of the followings:
- Self-employed individuals, independent contractors or sole proprietors with no employees at the time of the loan application.
- Did not reduce annual salary or hourly wages of any employee by more than 25% AND did not reduce the number of employees or the average paid hours of employees.
- Did not reduce annual salary or hourly wages of any employee by more than 25% AND the company was unable to operate at the same level of business activity as before due to compliance with requirements established related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirements related to COVID-19.
Companies that do not meet any one of these requirements must use the long form to apply for forgiveness.
The interim final rules were also updated to reflect the recent changes. Click here for a copy.
Remember that the Paycheck Protection Flexibility Act was signed into law on June 5, 2020 and it afforded greater flexibility to businesses on the length of time and how to use the PPP loan proceeds. For a refresher of what those changes are, click here.
If the goal of the business owner is to maximize forgiveness, it is imperative that they work closely with their CPAs and lenders to ensure that the application is completed appropriately and that they have the proper documentations to support the application. The devil is in the details. We have been key partners with our clients in this process, from loan application to how to properly disburse loan proceeds to accumulating supporting documentations along the way. We are ready to help businesses navigate this constantly changing landscape. Contact us if you would like to achieve your goal.