The U.S. Small Business Administration (SBA) published new guidance in mid July 2021 designed to simplify and speed up the forgiveness process for businesses and not-for-profits with Paycheck Protection Program (PPP) loans of $150,000 or less. The $150k forgiveness application is just a one page attestation with no payroll (or other) support required.
The SBA also announced that it launched a new application portal Aug. 4, allowing borrowers to apply for forgiveness directly with the agency instead of having to go through their lender. More than a 1,000 banks have agreed to allow access to the portal for several million borrowers.
Note that at the time of this post, the direct forgiveness website was not available (See image below).
Additionally, based on the Journal of Accountancy article (link below) and SBA Final interim rule, the SBA is introducing a COVID Revenue Reduction Score.
To streamline forgiveness of second-draw PPP Loans of $150,000 or less where the borrower did not submit documentation of revenue reduction at the time of the loan application (note that a 25% reduction of quarterly revenue versus prior year quarter was a requirement for the second round of PPP), the SBA will offer an alternative form of revenue reduction confirmation.
Each second-draw PPP loan of $150,000 or less will be assigned a COVID Revenue Reduction Score created by an independent, third-party SBA contractor, based on a variety of inputs, including industry, geography, and business size, and current economic data on the economic recovery and return of businesses to operational status.
The score will be maintained in the SBA’s loan forgiveness platform and will be visible to lenders to use as an alternative to document revenue reduction. Additionally, the score will be visible to those borrowers that submit their loan forgiveness applications through the platform using the direct borrower forgiveness process described in the next section.
When the score meets or exceeds the value required for validation of the borrower’s revenue reduction, use of the score will satisfy the requirement for the borrower to document revenue reduction. When the score does not meet the value required for validation of the borrower’s revenue reduction, and if the borrower has not already provided documentation to the lender that validates the borrower’s revenue reduction, the borrower must provide documentation either directly to the lender (for those lenders that do not opt in to the direct borrower forgiveness process) or provide documentation to the lender by uploading it to the platform.
PPP Lenders participating in direct forgiveness – https://www.sba.gov/document/support-ppp-lenders-participating-direct-forgiveness
PPP direct forgiveness portal (not working at the time of this post) – https://directforgiveness.sba.gov/
Link Journal of Accountancy – https://www.journalofaccountancy.com/news/2021/jul/sba-streamlines-forgiveness-process-most-ppp-loans.html