Paycheck Protection Program (PPP) loans provided a vital lifeline for small businesses struggling to meet payroll expenses during the COVID-19 pandemic. One of the more attractive aspects of the program is the potential to have these loans forgiven, but the application process has been complex and cumbersome. Fortunately, the SBA just released new guidelines that simplify the process for business owners who borrowed $50,000 or less.

New Guidance on PPP Loan Forgiveness

New, Simplified Process

The standard application process for PPP forgiveness requires complex calculations and extensive documentation. The new rule, however, allows business owners who borrowed less than $50,000 to submit a simple one-page form. It also reduces the documentation required by giving borrowers the opportunity to self-certify that the funds were spent according to the program’s guidelines. 

Self-Certification

Most borrowers had to submit proof that PPP funds were spent on payroll, rent, mortgage interest, or utilities to qualify for forgiveness. Borrowers were also required to show that they did not lay off any workers since the funds were disbursed. While those requirements still apply to businesses that borrowed more than $50,000, smaller businesses can now simply submit their own payroll and accounting records.

Relaxed Requirements

The certification process may be a formality since the SBA has also eliminated all qualifications for this group of borrowers. The government assumes that most businesses that borrowed less than $50,000 are sole proprietors with few employees, so many of those restrictions don’t qualify. This means that you may qualify for forgiveness even if you had to reduce payroll expenses or furlough workers.

Applying for PPP loan forgiveness can be confusing and frustrating, which is why business owners throughout Lewisburg, PA, trust Donna J. Troutman, CPA, PC, to guide them through the process. Their team will examine your payroll records and loan documents, prepare your paperwork, and take the stress out of your forgiveness application. To schedule an appointment with a CPA, visit their website or call (570) 523-7337.