Things are constantly changing with the PPP and here are PPP updates that you’ll want to make sure you fully understand as it will affect your forgiveness process and your money.

1. There are 2 requests for forgiveness PPP. The updated PPP Loan Forgiveness Application and an EZ PPP Forgiveness Application.
2. Among the changes to the PPP in recent weeks are the SBA extending the period from 8 weeks to 24 weeks, reducing payroll costs from 75% to 60%, and establishing a safe harbor for businesses that have not been able to return. to the level of business activity prior to COVID-19.
3. The revised PPP loan forgiveness application includes changes to apply FTE from the date of application versus waiting until December 31, 2020. However, it is recommended that you do not wait until the end to apply. Apply as soon as you have spent the dollars and meet the various requirements; which vary depending on whether you are using the 8-week or 24-week option.
4. Borrowers who received PPP loans before June 5, 2020 can choose to use the original 8-week period or the new 24-week period.
5. The new EZ app can be used by those:
   1. That they are self-employed and have no employees,
   2. They did not reduce the wages of their employees by more than 25% or reduce the number of hours of their employees or
   3. Those that experienced reductions in business activity and did not reduce their employees’ wages or salaries by more than 25%.
6. The new week 24 allows for maximum loan forgiveness at $46,154 per employee versus $15,385 for week 8. NOTE: Schedule C taxpayers cannot increase their owner’s compensation during the 24-week period to that level. It is still a high of $15,385 for the 8-week period (8/52 of 2019 Net Income) and $20,833 for the 24-week period (2.5/12 of 2019 Net Income). It’s the fine print here that will catch some, so be sure to visit your accounting professional.

Check out these 2 resources for more information:

1. United States Department of the Treasury website here.
2. New PPP application released here.

Many have already passed the 8-week point and banks are still not accepting forgiveness applications. The SBA was quick to award funds and kept the rules very vague, but almost every week we learn more and more details. They have yet to give firm guidance to lenders so that they feel comfortable opening the discharge process. We are hoping for the end of July 2020, but it may take until August before we can start applying.

No one knows if they will continue to review and revise the PPP forgiveness process or if we will start seeing banks accepting forgiveness applications as soon as some PPP recipients have already completed the 8 week period. The key is to apply sooner rather than later once you’ve spent the dollars within the guidelines and the banks have opened for forgiveness applications. Don’t wait unnecessarily, as you may find the ongoing changes unfavorable…it’s hard to tell.

The keys for the forgiveness process to run smoothly are:

1. Have good accounting records.

2. Make sure you read the fine print on what you can spend the money on.

3. Keep copies of bank statements and bills to provide documentation your lender is likely to want.

4. If you don’t have a good relationship with an accountant, now is the time, as they are more valuable than ever.