U.S. Small Business Administration releases PPP loan forgiveness application

U.S. Small Business Administration releases PPP loan forgiveness application
Many small businesses across the country and right here at home are getting more financial help all thanks to the Paycheck Protection Program. (Source: KSLA)

WASHINGTON (WAFF) - The U.S. Small Business Administration released new guidance for those that applied for assistance through the Paycheck Protection Program (PPP).

The instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.

The form includes several measures to reduce compliance burdens and simplify the process for borrowers, including:

  • Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
  • Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
  • Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
  • Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined

The PPP was created by the CARES Act to provide forgivable loans to eligible small businesses to keep American workers on the payroll during the COVID-19 pandemic. The documents released Monday will help small businesses seek forgiveness at the conclusion of the eight-week covered period, which begins with the disbursement of their loans.

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