SBA Releases New Paycheck Protection Program Loan Remission Applications Including EZ Application | Jackson walker

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Revised PPP loan forgiveness requests

On June 16, 2020, the Small Business Administration (SBA) released revised Paycheck Protection Program (PPP) loan forgiveness requests:

  1. The revision Paycheque Protection Program Loan forgiveness request revised June 16, 2020 [SBA Form 3508 (06/20)] (the “Revised Application”); and
  2. New Paycheck Protection Program PPP Loan Forgiveness Application Form 3508EZ [SBA Form 3508EZ (06/20)] (the “EZ Application”).

The revised request

The revised request follows the same format and requires substantially the same information as the previously published Paycheck Protection Program Loan Forgiveness Request. [SBA Form 3508 (05/20)], but has been revised to comply with the requirements of the Paycheck Protection Program Flexibility Act, 2020 (PPPFA).

See Jackson Walker’s June 5 article regarding PPPFA changes ”

Instructions for completing the revised application can be found here.

The EZ app

The EZ app now offers PPP borrowers a simplified approach to requesting loan forgiveness; however, only certain PPP borrowers are eligible to use the EZ app instead of the revised app.

In order to use the EZ app, a PPP borrower must be able to meet one of the three criteria below:

  1. The borrower is a self-employed person, independent contractor or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee salary in the calculation of the average monthly payroll in the borrower application form [SBA Form 2483].
  2. The borrower:
    1. has not reduced an employee’s annual or hourly salary by more than 25% during the period covered or the period of alternative pay coverage compared to the period between January 1, 2020 and March 31, 2020 (for the purposes of this statement, “employees” means only those employees who did not receive, in a single period in 2019, wages or salaries at an annualized rate of pay in an amount greater than 100,000 $); AND
    2. did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the period covered. (Ignore reductions resulting from an inability to rehire individuals who were employees on February 15, 2020 if the Borrower was unable to hire employees of similar qualification for unfilled positions on or before December 31, 2020 restore and the employee refused).
  3. The borrower:
    1. has not reduced an employee’s annual or hourly salary by more than 25% during the period covered or the period of alternative pay coverage compared to the period between January 1, 2020 and March 31, 2020 (for the purposes of this statement, “employees” means only those employees who did not receive, in a single period in 2019, wages or salaries at an annualized rate of pay in an amount greater than 100,000 $); AND
    2. could not operate during the Covered Period at the same level of commercial activity as before February 15, 2020, due to compliance with established requirements or guidelines issued between March 1, 2020 and December 31, 2020 by the Secretariat to Health and Human Services, the director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, with respect to maintaining standards of sanitation, social distancing, or any other work or customer safety related to COVID-19.

Instructions for completing the revised application can be found here. The EZ request must be submitted to the PPP lender and can be submitted electronically.

Recomendations

The revised application and the EZ application should make it easier for PPP borrowers to request loan forgiveness. These forms and accompanying instructions include steps to reduce compliance burdens and simplify the application process for PPP borrowers. We strongly recommend that PPP borrowers contact their PPP lender to discuss the process and procedure used to process loan forgiveness requests.

See Jackson Walker’s May 28 article regarding advice on loan cancellation and review procedures ”

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