In an effort to streamline the process, the U.S. Small Business Administration has just put out an easier to understand application for business owners who earlier this year received a Paycheck Protection Program loan.
In a statement, Treasury Secretary Steven Mnuchin said the idea behind the more simplified form is to make the “forgiveness process as simple as possible, while also protecting against fraud and misuse of funds.”
The new forgiveness policy applies specifically to business owners who have received Payroll Protection Program loans of $50,000 or less.
Passed as part of the Coronavirus Aid, Relief, and Economic Security Act, the $669 billion Payroll Protection Program has been designed from the start to help sole proprietors and small businesses, among others, pay for their payroll costs during the pandemic shutdown.
The program has also provided assistance to small businesses for utility, rent, and interests costs.
According to Small Business Administration figures, more than 5.2 million PPP loans, with a dollar amount of $525 billion, were approved between April and August.
The average loan size was just over $100,000.
In order to meet the criteria for having their loans forgiven, business owners must have applied no less than 60% of their PPP loan funds toward payroll expenses.
In announcing the new loan forgiveness application process, Jovita Carranza, administrator of the Small Business Administration, said the new form “demonstrates our relentless commitment to using every tool in our tool belt to help small businesses and the banks that have participated in this program.”
By Garry Boulard
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