After passing several rounds of funding options to help small businesses overcome COVID-19 financial challenges, the U.S. Small Business Administration has published an application to allow businesses to have their loans forgiven.
The application will allow businesses who were approved for funding from the SBA’s Paycheck Protection Program (PPP) to have loans at least partially forgiven if they used that funding to keep employees on the payroll for an eight-week period that begins when the company received the funds.
The form an instructions inform borrowers how to apply for forgiveness of the loans consistent with the CARES Act, a financial package of more than $2 trillion aimed to help small businesses with the $350 billion PPP, provide financial support for Americans and other measures.
That funding, originally approved in March, ran dry in April and was replenished later that month with another $500 billion.
According to a press release from the SBA, the form includes instructions on how to reduce compliance burdens and simplify the process, 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
Congress is currently debating on another round of relief, this one a $3 trillion economic package that includes another $10 billion in emergency grants, strengthening the PPP, enhancements to new employee retention tax credits, new COVID-19 workplace standards, another round of $1,200 stimulus checks to Americans, hazard pay for essential workers, state and local aid and assistance for healthcare organizations.
House Democrats passed that measure — the HEROES Act — last week, but it is unclear if the bill will pass the Senate and President Donald Trump’s desk as Congressional leaders remain split on approving more relief and reopening the economy.