The Small Business Administration and the Department of Treasury have released what they say is a simpler loan forgiveness application for Paycheck Protection Program loans of $50,000 or less.
The SBA introduced the PPP loans in a bid to help small business owners pay their employees in the wake of economic hardship brought on by the Covid-19 pandemic, as part of the Coronavirus Aid, Relief, and Economic Security Act signed into law in March.
In all, the program provided 5.2 million loans worth $525 billion that helped support more than 51 million jobs, Treasury secretary Steven Mnuchin says in a statement announcing the modified loan forgiveness application.
The SBA and the Treasury also say that they’ve simplified the forgiveness process for PPP lenders.
The "action streamlines the forgiveness process for PPP borrowers with loans of $50,000 or less and thousands of PPP lenders who worked around the clock to process loans quickly,” Mnuchin say in the statement. “We are committed to making the PPP forgiveness process as simple as possible while also protecting against fraud and misuse of funds. We continue to favor additional legislation to further simplify the forgiveness process.”
The SBA began approving loan forgiveness applications and remitting payments to PPP lenders on October 2, the agency says.
Around 3.57 million outstanding PPP loans are for $50,000 or less, representing roughly $62 billion of the entire program, according to the interim final rule on the simplified application process. However, the simplified exemption only applies to businesses that reported at least one employee other than the owner, representing around $49 billion, or 9% of the overall PPP loan amount, the SBA says.
FA-IQ found in August that at least 1,000 firms offering financial advice received PPP loans of $150,000 or more. Earlier, an analysis by FA-IQ sister publication FundFire found that several wealth management practices that received the loans had serious black marks on their disciplinary records.
Last month, the Department of Justice announced that it charged 57 defendants since early May, representing more than $175 million borrowed from the program, over alleged PPP loan scams.
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