On May 15, the Small Business Administration and Treasury Department released the Loan Forgiveness Application for the Paycheck Protection Program authorized by the CARES Act in March.
The application is to be used by PPP borrowers with regard to applying for forgiveness of the loans from the borrower’s lending institution. View the Loan Forgiveness Application and instructions. A statement announcing the release of the form can be found here. The agencies also indicated additional guidance regarding loan forgiveness will be issued soon to help borrowers and lenders learn about their responsibilities.
Additionally, on May 15, the House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act (H.R. 6800), new legislation to address the COVID-19 pandemic, by a vote of 208-199. The HEROES Act provides nearly $3 trillion additional funding for state and local governments; a second round of stimulus checks to individuals; and includes many other provisions aimed at addressing various aspects of the COVID-19 crisis.
H.R. 6800 includes the following provisions with respect to the PPP, which, if ultimately enacted into law, would make substantial changes to the program:
- Extends the covered period of the PPP program to 24 weeks from the current eight weeks
- Extends the PPP through Dec. 31 from its current end date of June 30
- Increases the maximum loan period from two to five years
- Removes the 75/25 rule regarding the use of PPP funds to qualify for forgiveness
Additionally, H.R. 6800 contains the following provisions that may be of interest to businesses:
- Increases the employee retention credit’s applicable percentage of qualified wages to 80% and maximum credit per employee from $5,000 to $15,000. It also replaces the 100-employee threshold for determining the relevant qualified wage base with a new definition of a large employer as one with greater than 1,500 employees and gross receipts of greater than $41.5 million in 2019.
- Extends availability of tax credits to reimburse employers for paid sick and family leave benefits through the end of 2021
- Introduces a new 50% refundable payroll credit for certain fixed expenses of smaller employers subject to closure by reason of COVID-19
- Introduces a new 90% refundable tax credit for self-employed individuals experiencing a significant loss of income
Senate Republican leaders have declared this legislation to be dead on arrival in the Senate. However, Senate Republicans may propose a less ambitious COVID-19-related legislative package soon, and some of the previously listed provisions may be considered in any legislative package that emerges from the Senate.
