Get Your Paycheck Protection Program Loan Forgiven

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Get Your Paycheck Protection Program Loan Forgiven

The many laws that were created in response to COVID-19 aren’t always easy to navigate. If you received a loan through the Paycheck Protection Program, what do the latest updates mean for you? How can you ensure forgiveness for that loan?

Application

Most importantly, you will need to fill out a Loan Forgiveness Application. However, there is more than one. There’s the standard government form, then there’s the EZ form. In order to use the simplified form, borrowers must meet certain criteria related to the reduction of salaries, wages, or hours, the level of business activity, and the number of employees. Instructions for filling out both forms are available on the government’s website, but it can be a confusing and tedious process that requires time and attention.

PPP Flexibility Act

In order to receive forgiveness for a PPP loan, the money needs to be spent in certain ways during a certain period. To make it easier for businesses like yours to receive loan forgiveness, the Paycheck Protection Program Flexibility Act of 2020 was signed into law. Notably, this program:

  • Extends the period in which the loan funds must be spent to 24 weeks or December 31st of this year, whichever comes first.
  • Lowers the payroll cost rule from 75% to 60%. That grants added flexibility to spend money on operations such as electricity, internet bills, rent, and more.
  • Expands the FTE Safe Harbor provision. This helps avoid a reduction in the loan forgiveness amount due to reducing the full-time employee population by giving borrowers more time to satisfy employment requirements and restore reduced wages.
  • Grants a longer loan deferral period (principal, interest, and fees) for those who must pay back a portion of the loan.

Your Next Steps

While the Paycheck Protection Program was welcome news to many, it didn’t have the smoothest roll-out. As congress watches the loans play out in businesses like yours, they continue to make adjustments designed to smooth out the process. These are not always easy to interpret. At Synergy, we’re HR and payroll experts for small and medium-sized businesses. If you’re unsure about your next step and need help getting your PPP loan forgiven, we’re here to talk you through it.