The Small Business Administration (SBA) has released a simple one-page forgiveness application for Paycheck Protection Program (PPP) borrowers who obtained loans of $50,000 or less. The new application removes calculations required on prior forms and simplifies documentation requirements. Read the article on Entrepreneur here.
SBA Releases PPP Forgiveness Application and Makes Critical Clarifications and Documentation Requirements
The SBA released its Paycheck Protection Program (PPP) Loan Forgiveness Application and clarified a few critical definitions and documentation requirements in their instructions. The forgiveness application is completed by the small-business borrower and is submitted to their bank or lender whom they received their PPP loan from. The application consists of 11 lines that when calculated results in the amount of forgiveness a small-business owner will be eligible for. The forgiveness component of PPP is what attracted small-business owners to take out PPP loans in droves, as the program promised forgiveness of amounts loaned so long as the small business used the funds for payroll, business mortgage interest, rent and utilities. For a summary on forgiveness rules please refer to my prior article here.
The American Bankers Association reported on April 12 that $205 billion of the $350 billion appropriated for Paycheck Protection Program (PPP) loans has been claimed. This number presumably represents applications that banks have processed and that have been approved through the Small Business Association (SBA). Keep in mind, approval by the SBA occurs before the loans are actually documented and funded.
While some small-business owners have received their PPP funds, the vast majority are still looking for a bank or are somewhere in their bank’s application or funding process. Frustrations are running high amongst small-business owners, but there is hope that the funding of these loans will increase significantly over the next week, as banks who started taking applications early are now moving on to the loan document and funding process. (For an overview of the PPP loan and how it can be forgiven, please refer to my prior article here.)
Many small-business owners are completing their Paycheck Protection Program (PPP) loan applications and are running into common questions and roadblocks. The immediate question right now revolves around two issues: First, how do I work with my bank or find a bank to get it submitted? And second, how do I properly calculate the loan amount on the application? Read the article on Entrepreneur here.