New PPP forgiveness applications released

The U.S. Small Business Administration (SBA), in consultation with Treasury, released a revised loan forgiveness application for the Paycheck Protection Program (PPP).  The SBA replaced the original 11 page application with a shorter five-page application and an even shorter three-page EZ application that can be used by borrowers who meet the established criteria.The SBA also unveiled a new EZ application for forgiveness of PPP loans.

The applications reflect changes to the PPP made by the Paycheck Protection Flexibility Act of 2020, P.L. 116-142, which became law June 5. The applications and instructions are available in the links below:

• Revised PPP Loan Forgiveness Application and instructions
• EZ PPP Loan Forgiveness Application and instructions

The releases Wednesday came only hours after the SBA issued a new interim final rule providing guidance on how to calculate employee and owner compensation for loan forgiveness in the new 24-week covered period created by the Paycheck Protection Program Flexibility Act of 2020 (H.R. 7010).

The legislation makes the following changes to the Paycheck Protection Program:

• Establishes a minimum maturity of five years for a paycheck protection loan with a remaining balance after forgiveness;
• Extends the expense forgiveness period from eight weeks to 24 weeks during which a loan recipient may use such funds;
• Increases the non-payroll portion of a forgivable covered loan amount from 25% to 40%;
• Extends the period in which an employer may rehire or eliminate a reduction in employment, salary or wages that would otherwise reduce the forgivable amount of a paycheck protection loan;
• Allows businesses that receive loan forgiveness to also receive payroll tax deferment;
• Ensures businesses won’t suffer due to increased unemployment benefits.