Small businesses can now apply for loan forgiveness for SBA Paycheck Protection loans

Small businesses can now apply for loan forgiveness for SBA Paycheck Protection loans
The Paycheck Protection Program was created by the CARES Act to provide forgivable loans to eligible small businesses to keep American workers on the payroll during the COVID-19 pandemic.

WASHINGTON, D.C. (WLOX) - Small business owners and independent contractors who received a Paycheck Protection loan from the SBA can now apply to have that debt forgiven.

The Paycheck Protection Program was created by the CARES Act to provide forgivable loans to eligible small businesses to keep American workers on the payroll during the COVID-19 pandemic.

Applications for loan forgiveness through that program are now available on the U.S. Small Business Administration’s website.

The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.

The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:

  • Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
  • Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
  • Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
  • Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined

The documents released Monday will help small businesses seek forgiveness at the conclusion of the eight-week covered period, which begins with the disbursement of their loans.

Click here to view the application and instructions.

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