Washington — The Small Business Administration and U.S. Department of the Treasury released the Paycheck Protection Program Loan Forgiveness Application on May 15.
The Paycheck Protection Program is a loan established by the Coronavirus Aid, Relief, and Economic Security Act to provide a direct incentive for small businesses to keep or rehire their workers.
According to Treasury, the loan will be forgiven as long as:
• The loan proceeds are used to cover payroll costs, and most mortgage interest, rent and utility costs over the eight-week period.
• Employee and compensation levels are maintained.
According to the Small Business Administration, the application form for forgiveness contains several measures to reduce compliance burdens and simplify the process, including:
• Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with their regular payroll cycles.
• Flexibility to include eligible payroll and nonpayroll expenses paid or incurred during the eight-week period after receiving the loan.
• Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.
• “Borrower-friendly implementation of statutory exemptions” from loan forgiveness reduction based on rehiring by June 30.
• A new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined.
The Small Business Administration said May 15 it also plans to issue regulations and guidance to further assist borrowers and lenders.
As Congress works on the next COVID-19 relief package, the ADA is urging Congress to increase the flexibility within the Paycheck Protection Program, including modifying the loan forgiveness provision to help small businesses make more appropriate decisions about staffing and payroll based on when they plan to fully reopen. The ADA and Organized Dentistry Coalition are also asking Congress to allow the loan funds to be used for purchasing additional personal protective equipment as well as for tax credits to be provided for personal protective equipment.
All of the ADA’s Small Business Administration resources can be found on the ADA website.
For the latest updates about issues surrounding COVID-19, visit ADA.org/coronavirus.