Updated PPP Loan Forgiveness Application Forms and Guidance

Earlier this month, President Trump signed the Paycheck Protection Flexibility Act. Then on June 17, the Small Business Administration (“SBA”) released a revised loan forgiveness application for the Paycheck Protection Program (“PPP”) and, in addition to the revised application, the SBA also released a new EZ application also applicable for forgiveness of PPP loans.

Revised Application Highlights:

The revised PPP loan forgiveness application and instructions include several noteworthy changes, including:

  • Health insurance costs for S corporation owners cannot be included when calculating payroll costs; however, retirement costs for S corporation owners are eligible costs.
    • Health insurance premiums for non-owner employees ARE included.
  • Borrowers can apply for forgiveness anytime they feel that they are ready and qualified to do so. Borrowers can use the date the loan forgiveness application is submitted and do not have to wait until December 31 to apply for forgiveness to use the safe harbors.
  • Borrowers that received loans before June 5 can choose between using the original eight-week covered period or the new twenty-four-week covered period.

EZ Application Highlights:

As the name suggests, the EZ PPP loan forgiveness application (the “EZ application”) requires fewer calculations and less documentation than the full application. In fact, Treasury Secretary Mnuchin highlighted the simplicity of the EZ application, stating that he thinks “it should take 20 minutes to fill out”.

In order to be eligible to use the EZ application, borrowers must be able to certify that they:

  • are self-employed and have no other employees;
  • 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
  • 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%.

If you are able to certify the foregoing, then you can take advantage of the EZ application. Still, be sure to collect and submit your supporting documents with the EZ application to the bank. Do not wait until the last minute to gather your documentation!

If the last few months are any indication, more information and guidance is on its way; therefore, if you have questions regarding your small business’s PPP loan forgiveness application, please e-mail or call Eric Perkins at [email protected] or (804) 205-5162.

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