Newsroom

The Small Business Administration (SBA), in collaboration with the Treasury Department, Wednesday released a revised, borrower-friendly paycheck protection program (PPP) loan forgiveness application implementing changes made by the recently enacted Paycheck Protection Program Flexibility Act (H.R. 7010).

In addition, the agencies published a new EZ version of the forgiveness application for borrowers who:

• are self-employed and have no employees; or
• did not reduce the salaries or wages of their employees by more than 25 percent and did not reduce the number or hours of their employees; or
• experienced reductions in business activity as a result of health directives related to the pandemic, and did not reduce the salaries or wages of their employees by more than 25 percent.

Of note, 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 House Small Business Committee Wednesday held a hearing with PPP borrowers and lenders to discuss challenges of the program, including the forgiveness application. A number of lawmakers discussed the diversity in loans originated and the lack of simplicity in forms amid changing guidelines.

Witnesses also expressed concerns on the lack of clarity and guidance, and confusion regarding loan implementation. Ahead of the hearing, NAFCU Vice President of Legislative Affairs Brad Thaler called on committee members to support efforts to provide automatic forgiveness.

Additionally, Democratic Members of the Select Subcommittee on the Coronavirus Crisis have launched an investigation into whether big banks favored larger customers. The group sent letters to the Treasury Department, the SBA, and eight national banks seeking documents and information on the disbursement of PPP funds.

NAFCU will continue advocating for improvements to the PPP to ensure credit unions can lend effectively through the program.