On June 17, 2020, the Small Business Administration (SBA) released a new borrower-friendly, three-page “EZ” Paycheck Protection Program (PPP) loan forgiveness application (EZ Application), and also released a revised version of its original forgiveness application for borrowers who do not qualify to use the EZ Application.
The EZ Application requires less documentation and fewer calculations than the original application released in mid-May. To qualify to use the EZ Application, a borrower must meet one of the following criteria:
In addition to the EZ Application, the SBA also released a revised version of the forgiveness application for all other borrowers. The revised version is intended to address the PPP Flexibility Act’s revisions to the PPP requirements. Under the revised application, for purposes of loan forgiveness, borrowers may select either: (1) a 24-week covered period beginning on the PPP loan disbursement date, or the first day of the first pay period following the disbursement date; or (2) if the borrower received its PPP loan before June 5, 2020, an eight-week covered period. To avoid a loan forgiveness reduction, borrowers with a 24-week or an eight-week covered period must maintain their average weekly full-time equivalent (FTE) employee levels and average wage levels for the entire covered period as compared to the base measuring periods for FTE employee levels and wages, unless an exception or safe harbor for a reduction in FTE employee levels or wages applies.
The applicable safe harbors and exceptions are as follows:
The rules surrounding PPP loans are complex and business specific. If you have concerns about the rules, please contact Ford Turrell, Timothy Hillegonds, Rob Davies, Matthew Crowe, Charlie Goode, Jeffrey Ott or your Warner attorney.