COVID-19

Some businesses now have an easier way to apply for PPP loan forgiveness

Justin Ho Jun 18, 2020
Heard on: Marketplace
HTML EMBED:
COPY
A restaurant owner waits for customers in Key West, Florida. Joe Raedle/Getty Images
COVID-19

Some businesses now have an easier way to apply for PPP loan forgiveness

Justin Ho Jun 18, 2020
A restaurant owner waits for customers in Key West, Florida. Joe Raedle/Getty Images
HTML EMBED:
COPY

Businesses across the country are in the process of applying for forgiveness for the over $500 billion worth of Paycheck Protection Program loans made so far. This week, the Small Business Administration, in consultation with the Treasury Department, released a streamlined application form meant to cut down on the red tape surrounding the forgiveness process.

The forgiveness process seemed like it’d be pretty involved at first, said Natasha Crosby, who owns a realty company in Virginia. So when the Treasury’s three-page “EZ” form came out this week, Crosby was hopeful.

“It’s like a handful of questions here — seven lines, eight lines,” Crosby said. “It definitely looks a lot easier.”

The SBA said borrowers can use the shorter form if they are self-employed or if their businesses didn’t reduce employees’ wages by more than 25%.

Matt Hetrick of the accounting firm Harmony Group said such businesses are likely to get their loans fully forgiven.

“Anybody who’s using the EZ is saying, hey listen, I spent some money and there’s nothing that I did that will cause a reduction in how much of that money you’re going to forgive,” Hetrick said.

But the EZ application doesn’t address many concerns of small businesses, said Jackie Laundon, who runs a public health consultancy. She isn’t sure whether she can use the form if she spent her loan on health insurance premiums or certain utilities.

“I’m on websites and accounting blogs every other day, trying to figure out what am I exactly going to be eligible for,” she said.

And even to submit any PPP application, borrowers have to go through their banks. Laundon said her lender hasn’t started accepting applications.

“What they have on their website is that they are working internally to process SBA guidance, so that it’ll eventually make it easier for all of their applicants to apply for forgiveness,” Laundon said. She wants to apply as soon as she can, she added, so she doesn’t have to worry about the loan anymore.

COVID-19 Economy FAQs

What’s the latest on the extra COVID-19 unemployment benefits?

As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.

With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?

The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.

Which businesses got Paycheck Protection Program loans?

The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.

Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.

You can find answers to more questions on unemployment benefits and COVID-19 here.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.