The US Chamber of Commerce has published a terrific guide on the PPP Forgiveness. Download Here.
PPP FORGIVENESS INFO:
There is also a new “EZ” form available to certain self-employed borrowers and borrowers that have experienced a reduction in business activity due to compliance with federal health requirements related to the COVID-19 pandemic.
On June 5, Congress signed changes to the previous PPP act. Changes include:
- Extends the forgivable period from 8 weeks to 24 weeks or the end of the calendar year.
- Adds flexibility to the forgiveness ratio for non-wage expenses from 75% payroll and 25% non-payroll eligible expenses to 60:40.
- Establishes a minimum loan maturity of 5 years for the remaining balance after the balance is adjusted for forgiveness.
- Extends the required period during which an employer may restore wages to December 31st.
- Allows borrowers to defer payments until they receive compensation for forgiven amounts. Those who don’t apply for forgiveness can have 10 months from the program’s expiration to being making payments.
- Allows for PPP borrowers to also defer payroll tax payments including payment of principal, interest, and fees, until the date on which the amount of forgiveness determined under section 1106 of the CARES Act is remitted to the lender.
- The non-financial felony look-back period has been reduced from 5 years to 1; however, the period remains 5 years for felonies involving fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance. The application also eliminates pretrial diversion status as a criterion affecting eligibility.
Getting Ready to Apply for Forgiveness
Tracking your expenses during your PPP loan period is critical to applying for forgiveness as you will be required to provide documentation. Several lenders have developed tracking tools. Here is an example from Mascoma Bank.