This week, there was good news for millions of small business owners and entrepreneurs who have taken PPP funds. In short, if you meet specific criteria, the SBA and Treasury department released an EZ form and a more manageable process that will save you a lot of hassle and sleepless nights while you apply to get your loan forgiven.
What does it take to be able to use the EZ PPP Forgiveness forms?
You can use the EZ form if you are a self-employed individual, sole proprietor, or independent contractor. (as long as you did not include any employee salaries in your PPP application).
If you are any other business entity, it takes a bit more brain juice to figure it out.
The first criterion is whether or not, for anyone earning under $100K a year, you reduced their annual salary or hourly rate by more than 25% during your covered period compared to between January 1, 2020, and March 31, 2020. If you did this, buckle up and prepare for the more complex forgiveness process.
If you did not reduce pay according to the criteria above and did not reduce your number of employees or the average paid hours of employees between January 1, 2020, and the end of your covered period, you are good to go with the EZ form and process. You are exempt from this requirement if employees on the payroll on February 15, 2020, would not come back to work, and you were unable to hire or find similarly qualified employees by December 31, 2020.
The other significant exemption is that if you were unable to operate your business at the same levels as you were on February 15, 2020, due to laws related to sanitation, social distancing, or other customer/employee safety requirements due to Covid-19 you are exempt.
I will be sharing more information about the EZ forgiveness process on my Aminar at noon today.