Within just a few weeks, many lenders faced a hurricane of anxious customers and their paperwork for Paycheck Protection Program (PPP) loans. It may feel like we\u2019re now in the calm eye of that hurricane, but it\u2019s not over. The back end of the same hurricane is fast approaching in the form of PPP loan forgiveness. Often where a hurricane goes next is unpredictable, and so it is with PPP forgiveness. For you lenders out there, let\u2019s cover what we know.<\/p>\n
After the initial May release of a complicated, calculation-rich form, the SBA subsequently issued what they described as a \u201crevised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application.\u201d This was in response to mandates in the Paycheck Protection Program Flexibility Act (PPPFA) passed in early June. The revision took the original forgiveness application from 11 pages down to five. You can find the revised SBA form here Lenders – Are You Ready for PPP, Part 2: Forgiveness?<\/span><\/a>.<\/p>\n In addition, the SBA also published a new \u201cEZ version\u201d of the forgiveness application \u2013 just three pages \u2013 that applies to certain borrowers under specific circumstances. The EZ application requires fewer calculations and less documentation for eligible borrowers \u2013 you can find it here Lenders – Are You Ready for PPP, Part 2: Forgiveness?<\/span><\/a>.<\/p>\n According to the SBA, \u201cThese changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan.\u201d<\/p>\n To perhaps over-simplify, if business owners spend at least 60 percent of the loan on payroll costs within 24 weeks of receiving the loan, the whole loan will be forgiven. (The owner should spend the remaining percentage on mortgage, rent and\/or utilities.) The 24-week period can\u2019t extend beyond Dec. 31, 2020. The PPPFA changed these numbers from 75 percent and eight weeks, with the express purpose of making forgiveness more accessible. If a business owner misses the 60 percent mark, they can still get a portion of the loan forgiven \u2013 it\u2019s not an all-or-nothing calculation.<\/p>\n Both new applications give the option of using the original 8-week period (for loans before June 5, 2020) or an extended 24-week period. This should help spread out the forgiveness application crunch. But you should encourage your customers to apply once that 60 percent is reached \u2013 and not wait for the 24 weeks. Most businesses would want the debt gone as soon as possible.<\/p>\n According to the SBA, PPP provided \u201c4.5 million small business loans totaling more than $500 billion to ensure that approximately 50 million hardworking Americans stay connected to their jobs.\u201d There is still about $130 billion available. But hurry \u2013 August 8 is now the new deadline for all PPP loan approvals.<\/p>\n Our PPP Digital Loan Officer, Archie, can help you and your customers by processing new PPP loans in two minutes. And, when your customers look to have their loans forgiven, Archie can help you again \u2013 he understands the loan forgiveness eligibility rules and process. Visit Archie<\/a> or email us at solutions@prolifics.com<\/a>.<\/p><\/p>\n","protected":false},"excerpt":{"rendered":" Within just a few weeks, many lenders faced a hurricane of anxious customers and their paperwork for Paycheck Protection Program (PPP) loans. It may feel like we\u2019re now in the […]<\/p>\n","protected":false},"author":34,"featured_media":29458,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[49],"tags":[185],"class_list":["post-2789","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-business-automation","has-post-title","has-post-date","has-post-category","has-post-tag","has-post-comment","has-post-author",""],"acf":[],"builder_content":"","_links":{"self":[{"href":"https:\/\/prolifics.com\/usa\/wp-json\/wp\/v2\/posts\/2789","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prolifics.com\/usa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prolifics.com\/usa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prolifics.com\/usa\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/prolifics.com\/usa\/wp-json\/wp\/v2\/comments?post=2789"}],"version-history":[{"count":0,"href":"https:\/\/prolifics.com\/usa\/wp-json\/wp\/v2\/posts\/2789\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/prolifics.com\/usa\/wp-json\/wp\/v2\/media\/29458"}],"wp:attachment":[{"href":"https:\/\/prolifics.com\/usa\/wp-json\/wp\/v2\/media?parent=2789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prolifics.com\/usa\/wp-json\/wp\/v2\/categories?post=2789"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prolifics.com\/usa\/wp-json\/wp\/v2\/tags?post=2789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}What will be forgiven?<\/strong><\/h4>\n
24 is better than eight.<\/strong><\/h4>\n
Remember \u2013 PPP money is still available.<\/strong><\/h4>\n
Prolifics can help.<\/strong><\/h4>\n