The August 8, 2020 deadline to apply for a Paycheck Protection Program (PPP) loan has passed and loan applications are no longer being accepted. However, the Small Business Administration (SBA) has now opened an electronic portal for processing loan forgiveness applications.  Loan forgiveness applications can be submitted using either SBA Form 3508 or 3508EZ, but these must be submitted by the lender servicing the loan (rather than the borrower submitting directly to the SBA). It is the lender who will review the application and notify the SBA of how much of the loan amount can be forgiven.  The lender has 60 days to complete this review.  The SBA, in turn, has 90 days to send payment to the lender to cover the forgiveness of that amount.

The latest FAQs give clarifications in regard to payroll costs, non-payroll costs, and loan forgiveness reductions.  For payroll costs, there is information about the covered period for forgiveness, compensation costs, and owner-employees.  Under non-payroll costs, one defined issue is that of unsecured credit, which cannot be applied to loan forgiveness, but can be covered by loan monies received.  Tables, worksheets and formulas for determining loan forgiveness are addressed in the final set of FAQs.

Though both parties agree that more help for small businesses is needed, Congress has not reached a consensus concerning the proposals for the next stimulus bill, with several hotly debated issues still on the table, including the PPP, an eviction moratorium, small business tax credits, and more.  The new stimulus bill may extend the PPP.  It may also target the most detrimentally affected small business, specifically those with revenue losses of 50% or more this year, granting tax credits for wages paid out to employees during this time.

It remains to be seen exactly what the new stimulus bill will entail, but as you continue to make business decisions in this challenging economic time, the attorneys at Davis Miles McGuire Gardner can help you choose the options that will be best for your business.