SBA Simplifies Forgiveness Application for Some PPP Loans

The SBA released a new simplified Paycheck Protection Program (“PPP”) forgiveness application for loans of $50,000 or less on October 8, 2020 under a new Interim Final Rule.

Under the new rules, eligible borrowers will not have their forgiveness amount reduced if they had a reduction in full-time equivalent employees (“FTEs”) or a reduction in employee salary or wages during their covered period.

According to the SBA, there are approximately 3.57 million PPP loans of $50,000 or less (accounting for approximately $62 billion of the $525 billion in PPP loans).

Note: the new application cannot be used by borrowers that together with their affiliates received PPP loans of $2 million or more. See the link here for a refresher on the SBA’s affiliate rules.

Reference Links:

• New loan forgiveness application form here
• Instructions for completing this new forgiveness application here
• Interim Final Rule