AUGUST 2021 UPDATE:
Business owners can now apply for forgiveness directly with the Small Business Administration (SBA). This option is only available to borrowers with loans of $150,000 or less -- which is 95 percent of all loans issued in 2021.
The new forgiveness platform for loans $150,000 or less began accepting applications from borrowers on August 4th, 2021, here:
Borrowers that need assistance or have questions should call the SBA at (877) 552-2692, Monday – Friday, 8 a.m. - 8 p.m. EST.
If your PPP amount is over $150, 000 and you received your PPP loan through a bank in the SmartBiz network, your bank will be contacting you directly about applying for Forgiveness. Otherwise, you should reach out to your lender for information about when you can apply with them.
SBA Administrator Isabel Casillas Guzman shares additional details in an SBA press release:
“These entrepreneurs are busy running their businesses and are challenged by an overly complicated forgiveness process. We need to deliver forgiveness more efficiently so they can get back to enlivening our Main Streets, sustaining our neighborhoods and fueling our nation’s economy.”
In October 2020, the U.S. Small Business Administration, (SBA) in consultation with the Treasury Department, released a simpler loan forgiveness application for Paycheck Protection Program (PPP) loans of $50,000 or less. This action streamlines the PPP forgiveness process to provide financial and administrative relief to America’s smallest businesses.
New PPP loans will be 100% forgivable if certain requirements are met. The bank must submit documentation to the SBA for final approval of the forgiveness request.
The Small Business Administration announced on January 12, that it had granted nearly 85 percent of the applications for Paycheck Protection Program loan forgiveness to date. Borrowers of $50,000 or less have fared even better, with an 88 percent forgiveness rate so far.
Here’s PPP forgiveness information to date so you can get the funding you deserve to rebuild in 2021.
Here are key facts about the PPP forgiveness process and how it impacts business owners owing less than $50,000.
The new application form for PPP loans under $50,000 only requires borrowers to confirm the PPP-loan proceeds were used for eligible costs, and to provide supporting documentation showing expense payments. Small business owners should keep PPP loan forgiveness records for at least six years.
Only bank statements or cancelled checks are required to show payments from the business to the employee (including the business owner) to document the qualifying payments. Quarterly tax form 941 documenting paid payroll isn’t required.
Previously if an EIDL Advance was funded, it must be subtracted on the forgiveness request from the amount that would be eligible. However, this is another rule being debated. For more information about EIDL and PPP use, visit the SmartBiz Small Business Blog.
This new round of PPP funding includes new uses of funds. This can help you rebuild your business faster and easier:
Allowable use of proceeds includes:
Be sure to check with your lender about specific uses.
Review these restrictions on the new forgiveness application:
Although details have not been released, the first round of PPP funding required a small business to submit its PPP loan forgiveness application to the bank or lender who funded their PPP loan. The bank has 60 days to make a decision. If approved by the bank, the loan is then submitted by the bank to the SBA. The SBA then has 90 days to review and approve the application and will send payment to the bank paying off the small businesses PPP loan.
The new round of the Paycheck Protection Program is open NOW! The deadline to apply is May 31st, 2021 but it’s suggested that you apply ASAP as the funding ran out for the first round.
SmartBiz Loans is here to help you apply for this new round of PPP funding.
Start a streamlined application on the SmartBiz Loans website.
The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult legal and financial professionals, and the applicable SBA rules, for further information.