Relief for Businesses with PPP Loans of $50,000 or Less
In its October 8 interim rules, the Treasury Department and Small Business Administration offered some relief for businesses with PPP loans of $50,000 or less. In short, most borrowers with loans of $50,000 or less may use a simplified form to apply for loan forgiveness. This form will not reduce the borrower’s loan forgiveness amount based on reductions in full-time equivalent employees (FTEs) or reductions in employee salary or wages.
In other words, if a borrower with a loan of $50,000 or less reduced the number of employees (FTEs) or reduced the salary or wages of employees due to the pandemic, the borrower may still qualify for full forgiveness.
That said, the form, while simpler, is still not simple. Borrowers are still required to submit and/or maintain documentation in the form of bank account statements, payroll-service reports, tax forms, wage reports, unemployment insurance tax reports, payment receipts, canceled checks, account statements for contributions to employee health insurance and retirement plans, business mortgage interest payments, rent or lease payments and agreements, and more.
Keep in mind that borrowers do not qualify for the simplified form if, together with their affiliates, they received loans totaling $2 million or more.