Mar 03, 2021

Here’s What’s New With This Round of Loan Forgiveness

There will always be purists who like to stick with the original form of things. Perhaps you’re one of them. Here’s a little quiz to help you decide:

  1. Do you prefer The Godfather to The Godfather Part II?
  2. Do you prefer classic Coke to Diet Coke?
  3. Do you consider the new version of Saved By the Bell to be blasphemous?

If you answered “yes” to 2 or more of these questions, you might be a purist. And that’s just fine. There are plenty of examples of things in this world that only get worse as they move on from the original.

The Paycheck Protection Program (PPP), however, might just be an exception to the rule. The first round of PPP loans launched in 2020 and did a lot of good for a lot of American businesses. But the recently-released sequel also boasts plenty of great features.

One of the most popular improvements is the streamlined forgiveness application for businesses that receive PPP loans of $150,000 or less. If you fall into this camp, you’ll only need to submit a 1-page application that lists factors such as:

Don’t fret if your loan amount exceeds $150,000. The application for these larger loans isn’t quite as lean, but it is still very manageable. 

You should be aware that there have also been updates to the approved uses for PPP loans. As long as you only spend the money on eligible costs and expenses and meet the other program criteria, you can qualify for up to 100% forgiveness of the loan’s principal. Eligible costs and expenses include:

Remember that payroll is the main priority for these loans, as the name of the program suggests. So you need to spend a minimum of 60% of your PPP funds on payroll costs in order to qualify for forgiveness.

This article is only intended to introduce you to a few of the updates to PPP loans. Numerous intricacies will apply to your business’s unique situation, so it’s crucial to do your due diligence to ensure your compliance and get the largest amount of money forgiven as possible.

 

Disclaimer: The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice. All information, content, and materials available in this post are for general informational purposes only. Readers of this post should contact their attorney, business advisor, or tax advisor to obtain advice with respect to any particular matter.

About the author

Grant Olsen
Grant Olsen
Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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