SBA Streamlines PPP Forgiveness by Releasing EZ Forgiveness Application
Since the implementation of the CARES Act in the early weeks of the COVID-19 emergency, business owners and managers have been frustrated over how to navigate the intricacies of the Paycheck Protection Program. In response to those frustrations, the Small Business Administration (SBA) issued various updates and guidance, including a revised Final Interim Rule for determining payroll costs and loan forgiveness.
To further simplify the process, the SBA has released a revised forgiveness application, including a new, much simpler, three-page PPP Loan Forgiveness Application Form 3508EZ, for which many businesses may be eligible.
Do You Qualify?
To qualify for the EZ Application, borrowers must answer “yes” to at least one of these three questions on the application checklist:
- The Borrower is a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form (SBA Form 2483).
- The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period compared to the period between January 1, 2020, and March 31, 2020;
AND
The Borrower did not reduce the number of employees or the average paid hours of employees between January 1, 2020, and the end of the Covered Period.
- The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period compared to the period between January 1, 2020, and March 31, 2020;
AND
The Borrower was unable to operate during the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020, and December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.
Borrowers unable to answer any of the three qualifying provisions in the affirmative must use the longer, and now revised, 3508 PPP Loan Forgiveness Calculation Form and its associated instructions. The longer 3508 Application focuses on calculating potential adjustments to forgiveness based on employee headcount and wage reductions.
We Can Help With PPP Forms and Questions
If you have questions about the PPP loan forgiveness process or other issues related to the COVID-19 pandemic, Kreis Enderle’s Business Law Practice Group is available to assist you. Please contact us today!