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The Small Business Administration (SBA) and the Treasury Department released revisions to two interim final rules (IFR) related to the paycheck protection program (PPP): One on loan forgiveness and the other on SBA loan review procedures. These revisions implement changes made by the recently enacted Paycheck Protection Program Flexibility Act (H.R. 7010) and include both the recently revised, borrower-friendly PPP loan forgiveness application and the new EZ version.

Under the PPP Flexibility Act, small businesses have up to 24 weeks to use the loans and the deadline for rehiring workers would be extended from June 30 to the end of this year. The law also changed the requirement related to the portion of PPP loan forgivable amount that must be used toward payroll from 75 percent to 60 percent.

In addition, the EZ application requires fewer calculations and less documentation for eligible borrowers. Both applications allow borrowers to use the original 8-week covered period – if their loan was made before June 5 – or an extended 24-week covered period. The changes are designed to result in a more efficient process and make it easier for business to experience full forgiveness.

The revised IFRs allow borrowers to apply for loan forgiveness before the expiration of the covered period, so long as the PPP funds have been exhausted, and up to the maturity date. Waiting more than 10 months after the expiration of the covered period will exceed the deferment period and require borrowers to make loan payments until they apply for forgiveness.

The revisions to the IFRs supersede the previous de minimis exemption where a borrower’s forgiveness would not be reduced if an employee refused to come back to work after an offer of re-hire. This de minimis exemption will only be available for employers who offer to restore reduced hours and the employee refuses.

Further information is accessible on the SBA's and Treasury's websites. NAFCU will continue to monitor potential changes to the PPP and remain in contact with the SBA, Treasury Department, and Congress to ensure credit unions can lend effectively through the program. Access NAFCU's updated PPP FAQs here.