On June 17th, the Small Business Administration (SBA) released an updated loan forgiveness application including the long form (SBA Form 3508) and a new abbreviated version (Form 3850 EZ). It was necessary to update them because of the modifications made by the PPP Flexibility Act of 2020. The EZ version of the application was developed to make it easier for sole proprietors and the self-employed to apply. The new applications now include information on the 24-week covered period, the requirement to spend 60% of loan funds on payroll expenses, and a new safe harbor for those who have not been able to return to pre-COVID-19 business levels because of state and local regulations. In addition, the applications are shorter than the prior version and are accompanied by separate instruction documents. To help clients, prospects, and others who have received a PPP loan, Wilson Lewis has provided a summary of key points below.
Navigating loan forgiveness has been a challenge for many businesses and this new application is designed to make it as simple as possible. Unfortunately, not every borrower qualifies to use this forgiveness application. In fact, only those that meet one of the following criteria qualify:
In both application versions, there were a number of important changes made that borrowers need to be aware of when calculating the eligible forgiveness amount. They include:
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The new forgiveness applications and related instructions provide important direction and opportunities for Atlanta businesses. The new rules, exemptions, and safe harbors open the door to an increased loan forgiveness amount. Now is the time to review your situation and determine how you will be impacted. If you have questions about the information outlined above or need assistance with another PPP loan issue, Wilson Lewis can help. For additional information call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.
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