Millions of small business’s that received Paycheck Protection Program loans have been waiting for answers on how and when their loans would be forgiven. Now, the small business administration has announced a plan that would forgive almost 70% of all the loans it gave out.
The new guidance forgives PPP loans that were $50,000 or less, but also comes with a new rule. The rule allows businesses with no employees or businesses where the owner is the only employee, can now have most or all of their loan forgiven.
Initially, most of the forgivable portion of a PPP loan was that which was used toward paying employees. The new rule also relaxes the scrutiny requirements on lenders to review documentation from small business’s proving how the money was spent.
The forgiveness process laid out by the small business administration does not have the usual red tape that comes with most government forgiveness processes. Business owners who received loans of $50,000 or less have to fill out a one-page document, just released by the SBA, and have their lender process it.
However, the SBA points out there’s no guarantee and is still pushing for continued support from congress in the next stimulus bill. In addition, it is pushing for the SBA to extend the new guidance to loan $150,000 or less.
