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.
The rules governing your retirement accounts have been loosened in the year 2020. You have more time to put money in, can take money out early without penalty, and the required minimum distribution rules (RMD) for those 72 and older have been removed entirely.
Congress just passed the Paycheck Protection Flexibility Act of 2020 and improved the Paycheck Protection Program (PPPP) for small-business loans. The bill enhances the PPP by increasing the time small businesses can use funds and receive forgiveness from eight weeks to twenty-four weeks and by reducing the payroll cost rule from 75 percent to 60 percent. The President is expected to sign the bill immediately, and the SBA and Treasury will be tasked to update their regulations, guidance and forgiveness application.
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.
PPP Loan Developments: Only $120 Billion Left, Favorable Forgiveness Guidance from SBA and IRS Tax Pitfall
The SBA Paycheck Protection Program (PPP) is the most significant small-business relief effort in modern history. A key component of the $600 billion-plus (and counting) stimulus rollout is that beneficiaries can have their loans forgiven so long as they use the funds for qualifying expenses, which can include payroll, rent, mortgage interest and utility payments.
The program was extremely popular in round one, and the initial $350 billion in funding was claimed in only 13 days. The SBA began approving an additional $310 billion from the second round on April 27, but as of May 10, only $120 billion in funding remained. (A good chunk of which is owed to dozens of publicly traded companies having returned multi-million-dollar loans.)