{"id":198199,"date":"2020-06-23T10:54:38","date_gmt":"2020-06-23T17:54:38","guid":{"rendered":"https:\/\/www.nationalfunding.com\/blog\/?p=198199"},"modified":"2023-11-06T11:13:45","modified_gmt":"2023-11-06T19:13:45","slug":"what-are-the-updated-sba-paycheck-protection-program-ppp-loan-forgiveness-rules-and-the-new-ppp-flexibility-act","status":"publish","type":"post","link":"https:\/\/www.nationalfunding.com\/blog\/what-are-the-updated-sba-paycheck-protection-program-ppp-loan-forgiveness-rules-and-the-new-ppp-flexibility-act\/","title":{"rendered":"What are the updated SBA Paycheck Protection Program (PPP) Loan Forgiveness Rules and PPP EZ Loan Forgiveness Application?"},"content":{"rendered":"

Updated 06\/23\/2020<\/em><\/p>\n

As of June 5, 2020, a new bill was signed into law by the President to expand the PPP loan forgiveness rules. The Paycheck Protection Program Flexibility Act includes changes that should bring a sigh of relief for business owners who continue to struggle to get back on their feet in the wake of COVID-19.<\/p>\n

If you haven\u2019t yet applied for PPP, you can contact your business bank, credit union, or approved SBA lender to submit your application. For small business owners seeking financial support due to the Coronavirus Pandemic, the Paycheck Protection Program (PPP)<\/a> still has funds available after the second round of financial relief.<\/strong><\/p>\n

This federal program is part of the CARES Act (Coronavirus Aid, Relief, and Economic Security) that was signed by the President into law in late March. The PPP has been designed to help small business owners retain employees during the coronavirus pandemic.<\/p>\n

We outline some of the provisions that have been revised as part of the PPP loan forgiveness rules.<\/p>\n

What are the PPP Loan Forgiveness Rules Updates?<\/h2>\n

Here\u2019s a high-level summary of some of the key changes:<\/p>\n

    \n
  1. Borrowers have the option to extend the 8-weeks to 24-weeks for payroll costs to retain and rehire employees<\/li>\n
  2. The 75% required to be used on payroll expenses has been reduced to 60% of the total loan amount. In addition, the cap for forgivable, non-payroll expenses has increased from 25% to 40%<\/li>\n
  3. The June 30th<\/sup> deadline for penalties and calculations for reductions in workforce has been extended to December 31st<\/sup><\/li>\n
  4. Additional exceptions where the borrower made good faith effort and can document one of the following situations:\n
      \n
    1. The employer unable to rehire former employees or similarly qualified new employees, or the business was unable to restore business operations due to federal health guidelines and\/restrictions related to COVID-19<\/li>\n<\/ol>\n<\/li>\n
    2. Extended loan repayment period from 2 years to 5 years. This maintains an interest rate of 1%<\/li>\n
    3. Borrowers will be eligible for a 2-year deferral of employer\u2019s share of Social Security payroll taxes<\/li>\n<\/ol>\n

      What is the new PPP EZ Loan Forgiveness Application?<\/h2>\n

      The PPP Loan Forgiveness Application Form 3508EZ is now available<\/strong>. This EZ form is much easier \u2013 there\u2019s less documentation and fewer calculations required.<\/p>\n

      You can download from the treasury.gov website or here: PPP EZ Loan Forgiveness Application<\/a>.<\/p>\n

      There is a checklist available to help you fill out your loan forgiveness application form. These instructions also provide guidance on the documents you will need to include when you submit Form 3508EZ \u2013 the actual loan forgiveness application. Be prepared! You can download these instructions directly from the SBA.gov website: SBA Loan Forgiveness Instructions<\/a><\/p>\n

      PPP Loan Forgiveness Rules<\/h2>\n

      It\u2019s important to understand the instructions and fill out the PPP loan forgiveness application. While the current form will need to be updated based on the Paycheck Protection Program Flexibility Act, this application needs to be submitted to the PPP lender you are working with.<\/strong><\/p>\n

      For additional background, per the SBA website, the loan forgiveness form includes instructions and guidance to help you understand the process, including:<\/p>\n