The Small Business Administration in conjunction with the Department Of Treasury have issued new forgiveness application forms and instructions for filing for forgiveness in conjunction with the Paycheck Protection Program (PPP) Flexibility Act.
KEY REVISIONS & CLARIFICATIONS MADE TO THE FORGIVENESS APPLICATIONS:
- In addition to the regular application form, there is now an EZ application form. The new EZ application form is available to borrowers that:
- Are self-employed and have no employees, or
- Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number of hours of their employees, or
- Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%
- Employee cash compensation is capped at $46,154 (24/52*$100k) for a 24-week covered period
- Owner compensation replacement for self-employed, owner-employees of S-Corporations, and general partners is capped at $20,833 (2.5/12*$100k) for a 24-week covered period
- New FTE Reduction Safe Harbor in addition to the previously defined FTE Reduction Safe Harbor
- If you were 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 for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19.
- The bold and italicized area above is still up for interpretation, as it fails to identify state authorities as a qualifying issuer of requirements or directives. We will be looking for further guidance indicating if reductions in business activity due to compliance with State mandates, such as the New York PAUSE Act, would qualify for this safe harbor.
In news not related to PPP loans, the Economic Injury Disaster Loan (EIDL) is now open again to all businesses.
We believe that more guidance will be coming out. As soon as we have more information we will communicate what we know with you. Please don’t hesitate to reach out to a member of our COVID-19 task force at [email protected] at any time, and/or visit our COVID-19 Resource Center.