Just a year ago, businesses across the United States shuttered temporarily in response to the…
Following the first surge of COVID-19 cases in the United States, many Oklahoma businesses applied for federal funds through the government’s Paycheck Protection Program (PPP). One key element of the PPP is loan forgiveness, but business owners who received PPP funds must apply for that loan forgiveness. If you received funds and are in the process of requesting loan forgiveness, the Small Business Administration and the Treasury Department have introduced new guidance and changes to assist both lenders and PPP borrowers of $50,000 or less with the forgiveness process. The changes include
- a new simplified application,
- reductions in the information that lenders must receive, and
- an exemption from the reductions in the forgiveness amount that were tied to the reductions in the number of employees and their wages or salaries.
Changes for Borrowers of $50,000 or Less
Effective October 14, 2020, a new loan application, Form 3408S, has made it easier for business owners to apply for loan forgiveness by removing some of the loan application elements that confused borrowers and lenders. Specifically, the new application eliminates the need for complex calculations by allowing borrowers to enjoy full loan forgiveness regardless of reductions in the number of full-time equivalent employees and decreases in employees’ wages or salaries that occurred during the covered period. Borrowers who, together with their affiliates, received $2 million or more in Paycheck Protection Program funds are not eligible for this relief and must use the previously issued application.
These changes have not eliminated every requirement for eligible borrowers. If you fall into the category of those eligible for this new application, you must provide specific certifications. These include certifications that
- the amount for which you are requesting forgiveness does not exceed the principal of your Paycheck Protection Program loan,
- payroll costs are at least 60 percent of the forgiveness amount,
- you have complied with the covered period requirements of your loan, and
- you used the funds to pay for costs eligible for forgiveness.
You must still show that you used the money as required under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and subsequent amendments.
These new changes also impact the Paycheck Protection Program lenders. The loan review process has been changing in an effort to quickly process the loans.
We Can Help
If you are an Oklahoma business owner ready to apply for loan forgiveness but need help understanding which application you should use, the deadline for applying, or what you need to provide as documentation, we are here to help. Call Littleton Legal (918) 608-1836 and schedule an appointment with a team member to help you identify the best approach to take for your unique business. We will do everything we can to help you adjust to this current financial reality.