SST Trusted Resource: SBA Streamlines PPP Loan Forgiveness
Please note: This blog is current to the date of its publication, Friday, July 30. For additional updates or assistance navigating these uncertain times, please contact us or visit our SST COVID-19 resource page
The U.S. Small Business Administration (SBA) recently announced the launch of a streamlined application portal for Paycheck Protection Program (PPP) loans of $150k or less, as well as a few other updates in the PPP Interim Final Rule (IFR) – COVID Revenue Reduction Score, Direct Borrower Forgiveness Process, and Appeals Deferment, which was released earlier in the week.
The announcement explains that 93% of outstanding PPP loans are for $150K or less. To simplify and streamline the forgiveness process for these loans, the SBA is making two changes:
- For Second Draw PPP Loans of $150k or less, where the borrower is required to provide revenue reduction documentation at the time of loan forgiveness, the SBA is allowing lenders to use a COVID Revenue Reduction Score as an optional method to document the borrower’s revenue reduction
- The score is based on a variety of inputs, including industry, geography and business size.
- Lenders can use the assigned score on an optional basis as an alternative to document revenue reduction.
- The SBA is making available a direct borrower forgiveness process for lenders that choose to opt-in as an alternative method for processing borrower loan forgiveness applications for all PPP loans of $150k or less. The portal is expected to open on August 4.
Additional guidance from the SBA is expected, and you can read more about the recent changes in the following article from the Journal of Accountancy:
SBA Streamlines Forgiveness Process For Most PPP Loans
SST will continue to keep you informed as the SBA makes additional changes and formal announcements. For additional tax information and guidance, contact the experts at SST today.
Special thanks to SST Partner Emily Cook for providing the content for this post.