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PPP Loan Forgiveness Application Changes and New EZ Form


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PPP Loan Forgiveness Application Changes and New EZ Form

June 25, 2020

Dear Clients, Colleagues and Friends,

The U.S. Small Business Administration has released an updated loan forgiveness application and instructions for Paycheck Protection Program loans. There is now a shorter, simplified “EZ” application that borrowers may qualify to use. Here are some key highlights from the EZ application and updated forgiveness application as well as their instructions:

  • Maximum forgivable amounts per employee are $15,385 for an 8-week covered period and $46,154 for a 24-week covered period. Owner-employees, a self-employed individual, or general partners are capped at $20,833.
  • Borrowers can use the EZ forgiveness application if they meet one of the following three criteria:
    • The borrower is self-employed, an independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form.
    • The borrower did not reduce annual salary or hourly wages of any employee by more than 25% during the covered period compared to the period between January 1, 2020 and March 31, 2020 AND the borrower did not reduce the number of employees or average paid hours during the covered period (ignore reductions that arose from an inability to rehire individuals who were employees on February 15, 2020 if the Borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020. Also ignore reductions in an employee’s hours that the Borrower offered to restore and the employee refused).
    • The borrower did not reduce annual salary or hourly wages of any employee by more than 25% during the covered period compared to the period between January 1, 2020 and March 31, 2020 AND the borrower was unable to operate during the covered period at the same level of business activity before February 15, 2020 due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.
  • Borrowers will need to make several representations and certifications on the EZ forgiveness application by initialing next to each. Among these, at least one of the following two must be true:
    • The borrower did not reduce the number of employees or average paid hours of employees between January 1, 2020 and the end of the covered period (other than reductions that arose from an inability to rehire individuals who were employees on February 15, 2020, if the borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020, and reductions in an employee’s hours that a borrower offered to restore and were refused).
    • The borrower was unable to operate between February 15, 2020, and the end of the covered period at the same level of business activity as before February 15, 2020 due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.

P&N will continue to monitor the latest guidance issued by the U.S. Department of the Treasury and the U.S Small Business Administration.

For all of our COVID-19 updates, please visit our website at www.pntax.com and our COVID-19 updates page at https://www.pntax.com/covid-19/.

If you have any questions or need further information, please contact your Presti & Naegele professional directly, or dial 212-736-0055 for immediate assistance. Stay safe.

Presti & Naegele