A bill has been introduced to the Senate that would allow for the automatic forgiveness of Paycheck Protection Program (PPP) loans under $150,000.
Named the Paycheck Protection Small Business Forgiveness Act, this bipartisan legislation would require businesses to submit only a one-page form that attests to the business’s eligibility for forgiveness and compliance with the CARES Act. In the state of Oklahoma, this potential legislation would ease the forgiveness process for roughly 57,000 loans.
Acknowledging the resource burden on lendees and participating financial institutions, this pending bill intends to reduce the work and documentation required for PPP forgiveness requests. For loans greater than $150,000, the documentation required for loan forgiveness can be found at the SBA website.
Of the PPP loans issued, 85% were less than $150,000, although these smaller loans total to only 26% of the funds allocated. For businesses that have yet to apply for PPP loans, the government has extended the date through which it will continue to accept applications. As of now, the deadline has been extended to August 8th, 2020.
Loan forgiveness is based on employee retention and how the funds were used. Businesses that used 75% of the loan to maintain the number of employees and their wages and used the remaining 25% for rent or mortgage obligations will be eligible for the greatest loan forgiveness.
Nationwide, more than 5000 lenders have processed almost five million loans. Over 500 billion dollars have been approved, with the average loan size being just over $100,000.
The Mettise Group’s COVID-19 resource page can be found here. Mettise will continue to post pandemic-related business information.