On Wednesday, June 17, 2020, the SBA came out with the EZ PPP Loan Forgiveness Application Form to streamline the forgiveness process for most business owners.

We have seen several tweaks to the Paycheck Protection Program throughout the past weeks including the Paycheck Protection Flexibility Act. This act made changes making PPP loan forgiveness more likely. Now, the new forgiveness application form aims to make the process simpler.

The new EZ application is two pages and requires less documentation and calculations than the revised Full Forgiveness Application (FFA).

To be eligible to use this EZ Application, borrowers must meet the following criteria from the SBA:

  • “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 or 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%.”

Page 1 of the EZ form has a checklist to help determine if you are eligible. If you can check one of those boxes, you are eligible. Page 2 of the EZ form contains certifications that are also on the checklist.
The EZ application asks for the following information (the numbers refer to “lines” in the application):

  1. Payroll costs
  2. Business mortgage interest payments
  3. Business rent or lease payments
  4. Business utility payments
  5. Add lines 1, 2, 3 and 4 to arrive at the potential forgiveness amount
  6. Loan amount
  7. Payroll cost 60% requirement (divide line 1 by 0.6)
  8. Forgiveness amount (the smallest of lines 5, 6, and 7)

All in all, this form is good. It is intended to make the loan forgiveness process easier for businesses that are eligible. We do want to mention we that we encourage everyone to complete the form that is eligible but not necessarily to send it to your lender. We are waiting for additional guidance but it may be that loans below a certain tolerance may be forgiven without any submissions. We will continue to update you as we learn more!

Need help? Give us a call or contact us here. We are here to help in this process where we can.

For other news we have sent out on the PPP and various topics, check out our blog here.