The Small Business Administration issued a simplified loan forgiveness application for businesses that received Paycheck Protection Program loans of $50,000 or less.
The updated forgiveness form reduces the amount of administrative work required for the application, according to the World Floor Covering Association. WFCA reports the form includes the following changes:
There will be no reduction in loan forgiveness for a reduction in the number of FTE employees the borrower has on its payroll, so there is no need to make this calculation.
There will be no reduction in loan forgiveness if salaries/wages are reduced by more than 25%, and the borrower will no longer be required to calculate whether every employee’s salary or wages were reduced and how overtime may impact the calculation.
There will be no need to report any employee information on the simplified application.
Borrowers do not have to make any calculations of their loan forgiveness amount on the form, and can simply input their loan forgiveness amount on the “honor system.” While the documents and calculations do not need to be provided in the application, the records supporting the forgiveness should be retained in the event of an audit.
Recipients of PPP loans have 10 months after the end of the covered period to apply to have the loan forgiven, according to WFCA. Instructions for the new forgiveness application can be found here, and the application itself can be found here. WFCA offers further explanations of PPP loans and guidelines on its website.
