By Michelle Loredo
Earlier this summer, the administration passed the Paycheck Protection Program Flexibility Act of 2020 that altered some of the guidelines for the PPP Loan and the loan forgiveness process. One of the biggest changes was that small business owners now only have to use 60 percent of the PPP loan on payroll and use the other 40 percent on any other Small Business Administration approved expenses.
Here are the PPP Loan Forgiveness rules that you must know before applying.
How Do I Start the Application Process?
With the recently passed Paycheck Protection Program Flexibility Act of 2020, borrowers have 24-weeks to use the funds from the PPP loan before having to apply for loan forgiveness. If you received the PPP loan before the flexibility act, you can choose the original eight-week period to use the funds and then begin applying for the PPP Forgiveness.
To apply, you have to complete the PPP Loan Forgiveness Application and submit it to your specific lender. Check with your lender to see if you can submit your application online.
What Does the Application Entail?
The application is split into four parts and if you’re a borrower, you must submit part one and part two to your lender.
What Information Do I Need to Fill the Application?
When you’re filling out the PPP Loan Forgiveness application, you must use the same information that you filled out in the original PPP loan application unless you changed names or addresses.
If you have received any amount of help from the Economic Injury Disaster Loan you add the EIDL application number and amount received to the PPP loan application. If your PPP loan is higher than $2 million, you must indicate that in the PPP Forgiveness application.
What Tax and Legal Documents Do I Need to Submit?
For this PPP loan forgiveness process, you need all your business’s documentation in place so that you’re able to the fill application with ease and submit required documents to your lender or the SBA as prompted.
Documents Listed Below:
After you apply, your lender must respond to you in 60 days as required by law.
Who Can I Contact if I Have any Questions?
The UH Texas Gulf Coast Small Business Development Center Network is here to help you with the PPP Loan Forgives process. The network has 14 locations across southeast Texas. All locations have business advisors that will help you virtually during this ongoing pandemic. We also have both live and on-demand webinars that can help you in this process.