EZ-DOES IT
In the last ten days, the SBA revised the PPP loan forgiveness applications and updated the instructions. There is now a Form “3508EZ” available for some borrowers which greatly simplifies the loan forgiveness process:
* PPP Forgiveness Application Form 3508EZ <PPP EZ application>
* PPP Loan Forgiveness Application Instructions <PPP EZ application instructions>
How do you know if you can use this “EZ” form? If any of these three statements apply, then the EZ form is for you:
1. The Borrower is a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form.
2. The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period compared to the period between January 1, 2020 and March 31, 2020; AND The Borrower did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period.
3. The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period compared to the period between January 1, 2020 and March 31, 2020; AND The Borrower was unable to operate during the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.
Here is what is clear: You can use the EZ form if you are self-employed, an independent contractor or sole proprietor with no employees.
What’s not so clear? The third statement. Never before was the concept of not “operating at the same level of business activity” included in the forgiveness process. Unfortunately there is no guidance yet as to how “business activity” will be measured or evaluated.
Do you have questions about the PPP loan forgiveness process? Or are you still in need of a PPP loan? Then call us today at (561) 361-8700 and schedule a complimentary consultation with one of our attorneys.