The Small Business Administration (SBA) issued new guidance yesterday designed to accelerate the end of the Paycheck Protection Program (PPP) by streamlining the process for millions of small businesses and nonprofit employers to have their emergency payroll loans forgiven.
The PPP was one of the largest and most popular federal relief programs created last year to help small businesses and nonprofit organizations survive the COVID-19 pandemic. ASAE and its advocates were instrumental in expanding eligibility for the PPP to include 501(c)(6) organizations at the end of last year.
The PPP provided more than 11.7 million forgivable loans totaling nearly $800 billion from April of last year through this May. The guidance issued by the SBA simplifies loan forgiveness for loans of $150,000 or less, which account for more than 90 percent of all outstanding PPP loans, the SBA said.
In its guidance this week, the SBA said it has notified banks that the agency is setting up its own online forgiveness platform that will accept applications from borrowers directly. In addition, the SBA will announce plans to spare certain borrowers who received second-draw PPP loans worth less than $150,000 from having to supply documentation proving that they suffered a 25 percent revenue reduction in 2020 that was a condition of the loans. The SBA plans to launch the site around Aug. 4.
“All of us want to be done with forgiveness – borrowers, lenders, government – by the fall, across the board,” said SBA Associate Administrator Patrick Kelley in a webinar this week. “So this is the final push that will hopefully put PPP in the rearview mirror for the borrowers, for the lenders and for the agency.”