The U.S. Small Business Administration and Treasury Department have streamlined the Payroll Protection Program loan forgiveness process for loans of $50,000 or less.
The move is designed to give financial and administrative relief to the nation’s smallest businesses while ensuring sound use of taxpayer dollars, the agencies said in a joint statement.
The simpler loan application is a two-page document that asks the borrower a handful of questions, including the number of employees at the time of the loan application and the number at the time when applying for forgiveness.
More than 63,000 Connecticut businesses received PPP loans totaling more than $6.6 billion, according to the SBA. Nationally, over 5.2 million businesses owners borrowed $525 billion.
The new application process will impact about 68% of all PPP borrowers but only $62 billion (or 12%) of all funds loaned.
Some borrowers can now have their loans forgiven even if they cut head count or wages after taking the loan, but will be required to submit payroll documents and other records.
The loan forgiveness process began in-mid August after the loan program closed.
The SBA began approving PPP applications and remitting forgiveness payments to PPP lenders for PPP borrowers on Oct. 2.
The agency said it will continue to process all PPP forgiveness applications as quickly as possible.
However, many lenders have delayed accepting applications with additional loan forgiveness legislation pending in both the U.S. House and Senate.
The PPP program was created by the Coronavirus Response, Aid, and Economic Relief Act, which initially established that debt repayments must begin six months after a loan was disbursed.
Congress later revised the law, allowing borrowers as long as 16 months to apply for forgiveness.