COVID-19

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

Justin Ho Jun 18, 2020
Heard on: Marketplace
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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

Are states ready to roll out COVID-19 vaccines?

Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.

How is the service industry dealing with the return of coronavirus restrictions?

Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.

How are hospitals handling the nationwide surge in COVID-19 cases?

As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.

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