After months of urging by smaller lenders and OFN, the Small Business Administration (SBA) released new guidance to simplify the forgiveness process for businesses and nonprofits with Paycheck Protection Program (PPP) loans less than $150,000.
Under the current forgiveness process, businesses must work directly with the lender and navigate a complex and time-consuming process. The new online platform, set to debut on August 4, will allow borrowers to apply for forgiveness directly from the SBA and is intended to reduce the administrative burden on lenders and business owners. To participate, lenders must opt in to the new platform.
The updated Interim Final Rule also removes the requirements for businesses that received second-draw PPP loans of less than $150,000 to document a 25 percent revenue reduction. The SBA will instead use a “COVID Revenue Reduction Score” to determine the required revenue reduction.
The changes put forth will impact thousands of small businesses: according to the SBA, loans of $150,000 or less account for 93 percent of outstanding PPP loans. OFN applauds the Biden Administration’s efforts to improve the PPP forgiveness process for lenders and borrowers as the program draws to a close.