Tax & AccountingJuly 28, 2021
SBA Announces Creation of New Website and Process to Simplify Forgiveness for $150K and Under PPP Borrowers
SBA Announces Creation of New Website and Process to Simplify Forgiveness for $150K and Under PPP Borrowers
The Small Business Association (SBA) announced today, July 28th , details of its plan to accelerate the end of the $1T Paycheck Protection Program (PPP) by creating a new website and eliminating the need for banks from having to document revenue losses for second-draw PPP borrowers, making it easier for the millions of employers who took advantage of the PPP loan program to have these payroll loans forgiven. Just under 7 million loans have yet to be forgiven.
The new rules apply to those with loans of $150,000 or less, more that 90% of all loans issued.
The purpose of the new initiative by the SBA is to simplify the effort to wind down the popular but often confusing program. Rather than forcing borrowers to apply for forgiveness through the financial institution they used to help apply for their loans, the new SBA forgiveness website will accept applications from small borrowers directly, taking very little time. This direct borrower forgiveness process is optional…the PPP lender must opt-in for their borrowers to make use of this new, simplified forgiveness process. The SBA’s intent here is to reduce the amount of time and effort that lenders need to spend in the process for its $150,000 or less PPP borrowers.
In addition, borrowers who received second PPP loans in 2021 for less than $150,000 won’t have to provide documentation proving that they suffered a 25% reduction in revenue reduction in 2020.
The SBA has urged lenders to opt in to the SBA's new forgiveness platform — "give it over to the government and get your life back." The SBA plans to launch the site on a pilot basis on Wednesday and have it go live around Aug. 4.
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