Washington - Yesterday, the U.S. Small Business Administration (SBA), in consultation with the Department of the Treasury, posted a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act of 2020, signed into law by President Trump on June 5, 2020. In addition to revising the full forgiveness application, SBA also published a new EZ version of the forgiveness application that applies to borrowers who:

  • Are self-employed and have no employees; OR
  • Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; OR
  • Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%

The EZ application requires fewer calculations and less documentation for eligible borrowers. Details regarding the applicability of these provisions are available in the instructions to the new EZ application form.

Both applications give borrowers the option of using the original 8-week covered period (if their loan was made before June 5, 2020) or an extended 24-week covered period. These changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan.

Click here to view the EZ Forgiveness Application.

Click here to view the Full Forgiveness Application.

In addition to the article above, below are some additional comments and resources regarding PPP Loan Forgiveness:

  • Interim Final Rules
    • This discusses the updated maximum payroll per individual if using 8 or 24 weeks as well as an updated calculation for 8 and 24 weeks for owners compensation replacement.
  • Journal of Accountancy
    • This provides a short summary of the changes in the Interim final rules and the new applications.

We also wanted to caution that the 25% reduction in wages does apply to both the 8 and 24 week periods. Any reduction in salaries or hourly wages over the covered period by more than 25% compared to the average pay in Quarter 1 will result in a dollar-for-dollar reduction of forgiveness.

If you have any questions, please contact your local Kemper office.