2-minute read
Exciting news for small business owners. As early applicants are starting to become eligible to apply for loan forgiveness, the SBA announced today that it has simplified the loan forgiveness application. The changes are a result of pressure coming from congress to simplify the process for entrepreneurs.
Here are the highlights
Two versions of the forgiveness application
- The EZ Forgiveness Application
- The revised Full Forgiveness Application
Which application is right for you, you ask?
The EZ application applies to you if any of the following statements are true:
- you are self-employed and have no employees
- you didn't reduce payroll of your employees by more than 25% and didn't reduce the number of hours of your employees
- you experienced a reduction in business activity as a direct result of COVID-19 and you did not reduce the payroll of your employees by more than 25%.
If none of those apply to you then you will use the Full Forgiveness Application.
Simplification
The SBA did simplify both of the EZ and Full Applications to streamline the forgiveness process. Obviously The EZ Forgiveness Application is the simplest. It totals three pages in length, and requires far less calculations and less documentation. The Full Forgiveness Application requires more calculations and documentation. HOWEVER it has been reduced from eleven pages to five pages.
The new 60/40 Rule applies to both applications. Both applications give you the option of using the original 8-week covered period or the new 24-week period. It is our hope that these changes will ultimately result in a smoother forgiveness process and most importantly ensure full forgiveness for small businesses as that is what the program was intended to do.