With the passage of the Paycheck Protection Program Flexibility Act of 2020 (“PPPFA”), small business owners will enjoy greater flexibility and a relatively easier path to toward forgiveness of their PPP loan. For example, one of the key provisions within the PPPFA is that a small business owner remains eligible for loan forgiveness even if they do not rehire all of their employees that were furloughed or laid off in the midst of the Coronavirus pandemic.
The Treasury Department and Small Business Administration (the agency tasked with managing the Paycheck Protection Program), released new loan forgiveness forms that dramatically reduced the documentation needed to apply for PPP loan forgiveness and will give many small business owners more options and opportunities to achieve full loan forgiveness, according to a great article published by the New York Times. For example, the new forms include a “safe harbor” option that enables small business owners to simply affirm they were not able to operate “at the same level of business activity” they had prior to the Coronavirus pandemic due to the requirements or safety guidelines of the state and/or federal government, including social distancing rules. With this new “safe harbor” provision in place, a small business owner remain eligible for full PPP loan forgiveness as long as they meet the other rules and regulations related to the PPP program, including the new requirement that at least 60 percent of their PPP loan money is used for payroll costs.
Positive Feedback from Business Community
The inclusion of a safe harbor provision to the PPP loan forgiveness application was widely hailed as a position step in helping the small business community. For example, the New York Times article question Albert J. Campo, an accountant in New Jersey who has worked with multiple small business owners throughout the Coronavirus pandemic.
“If you’re at 50 percent capacity, you can’t bring back your whole staff and pay them all. You just can’t,” said Mr. Campo to the New York Times. “This gives those borrowers flexibility.”
“This is a step in the right direction,” said Aimee Brierly to the New York Times. Mrs. Brierly is a spokeswoman for the Small Business Majority, an advocacy group.
“EZ” Firm for Self-Employed Business Owners
If you received a PPP loan and are self-employed or a partnership, you may be eligible to apply for loan forgiveness through a new, consolidated “EZ” form that does not ask for details about employee information or documents to substantiate your forgiveness application. Nevertheless, lenders still have the right to review and verify some your financial and business records.)
Access PPP Loan Forgiveness Docs Here
If you received PPP loan funds and want to apply for loan forgiveness, here are the relevant application forms: