As modifications continue to be implemented to the Paycheck Protection Program (PPP) loan forgiveness application, we are dedicated to helping your business along the way. The latest changes made by the Small Business Administration is the new “EZ” Loan Forgiveness Application. The EZ Application was executed in hopes to decrease the amount of time spent applying for loan forgiveness and designed to simplify the criteria to meet maximum eligible forgiven amount.
EZ Loan-Forgiveness Application and Qualifications:
According to Secretary of Treasury, Steven Mnuchin, this new EZ App will drastically cut down on the time needed to apply for PPP Loan Forgiveness. Mnuchin stated, “this application will take an estimated 10 minutes to collect your documents, and 10 minutes to fill out the form,” a timetable greatly reduced from that of the original two-hour estimation.
To qualify for the EZ Loan-Forgiveness Application, a business owner must meet one of three conditions:
You are self-employed and have no employees; or
You had employees, but did not reduce their salaries or wages during the covered period by more than 25 percent AND did not reduce the number of hours worked by employees; or
You had employees, but did not reduce their salaries or wages during the covered period by more than 25 percent, And do to complying with shelter-in-place laws during the covered period, you were unable to operate during the covered period at the same level of business that existed before February 15, 2020.
Other Ways to Apply for Loan Forgiveness:
Though noted as not as convenient as the “EZ” Application, the PPP Loan Forgiveness Application Form 3508 offers another way to apply for loan forgiveness if your business does not meet the EZ Application criteria.
Tips for Applying for PPP Loan Forgiveness:
Keep accounts of payroll costs during covered period
Track records of non-payroll expenses occurred during the covered period.
Understand how to account for payments made to furloughed employees
Updated PPP Loan Benefits:
In the most recent update to the PPP Loan regulations, in the beginning of June, the legislative passed the following changes made to the structure of the Paycheck Protection Program Loan:
Funds used for payroll reduced from 75% to 60%, gives 40% towards rent, utilities, etc.
Provides borrowers up to 24 weeks to use the funds vs 8 weeks
Extends the deadline to rehire workers to Dec. 31, 2020 vs June 30
Extends repayment of any unforgivable amount from 2 years to 5 years
We are happy to help navigate you through this process, please do not hesitate to contact us.