The SBA and the Department of Treasury released a revised, borrower friendly Paycheck Protection Program Loan Forgiveness Application a few weeks ago. In addition to the full forgiveness application, the SBA also released a new EZ version of the application that applies to borrowers that:
• Are self-employed and have no employees;
OR
• Did not reduce 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 salaries or wages of their employees by more than 25%
The EZ application requires fewer calculations and less documentation for eligible borrowers as detailed in the instructions for the EZ Application.
Both the EZ Application and the Full Application give borrowers the option of using the original 8-week covered period (if the loan was made before June 5th, 2020) or an extended 24-week covered period. These changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan.
Although the forgiveness portion of the PPP program may change, we are not anticipating any meaningful changes prior to the election on November 3rd. With this said, we encourage you to start assembling your information to document to how your PPP loan proceeds were used and submit your PPP Forgiveness Application and purporting information to First Westroads Bank. Documentation will include payroll records, cancelled checks, and bank statements. With the changes to the PPP program, at least 60% of the loan proceeds have to be used for payroll. Up to 40% of the loan proceeds can be used for eligible non-payroll expenses including rent payments, utilities, and interest of business loans for mortgages or real property.
A copy of the loan forgiveness applications and instructions are available below.
