SBA updates its New EZ and Revised Full Forgiveness Applications…Check this out!

Here is a new idea to share with your small clients that might want to apply for the new EZ or revised Full Forgiveness loans.

Check out the two new SBA loan applications to see what you might need to do to qualify.…

https://content.sba.gov/sites/default/files/2020-06/PPP%20Forgiveness%20Application%203508EZ%20%28%20Revised%2006.16.2020%29.pdf?utm_medium=email&utm_source=govdelivery

https://content.sba.gov/sites/default/files/2020-06/PPP%20Loan%20Forgiveness%20Application%20%28Revised%206.16.2020%29.pdf?utm_medium=email&utm_source=govdelivery

 Remember the U.S. Small Business Administration, posted this week a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act of 2020, signed into law by President Trump on June 5, 2020. 

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

In addition to revising the full forgiveness application, SBA also published a new EZ version of the forgiveness application that applies to borrowers that:

  • Are self-employed and have no employees, OR
  • Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees, OR
  • Experienced reductions in business activity because of health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than 25%.

The EZ application requires fewer calculations and less documentation for eligible borrowers.  Details regarding the applicability of these provisions are available in the instructions to the new EZ application form. 

Both applications give borrowers the option of using the original 8-week covered period (if their loan was made before June 5, 2020) or an extended 24-week covered period. 

These changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan. 

You may need the help of a professional CPA during this process so make sure you also check out the AICPA website on the subject for some additional ideas.

Here is a great article t from the Journal of Accountancy that will help walk you through the details.

“AICPA issues guidance on accounting for forgivable PPP loans https://www.journalofaccountancy.com/news/2020/jun/forgivable-ppp-loans-aicpa-accounting-guidance.html

Good Luck !!!

Another loan opportunity ( EIDL) to assist your clients was just released by the Small Businesses Administration..Check it out!

Here is a new opportunity for you and your clients to apply for the SBA’s Economic Injury Disaster Loans and Advance Program. It was reopened after several weeks to allow small business and non-profits to apply for loans that were impacted by CO-19.

The SBA yesterday announced that the Economic Injury Disaster Loan (EIDL) and EIDL Advance program applications will be accepted for both non-agricultural business and non-profit business.

https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sbas-economic-injury-disaster-loans-and-advance-program-reopened-all-eligible-small-businesses-and?__s=2s754l5w1k66qsxcjrtv

Also note that these monies can be used for a variety of purposes. Especially useful is the ability to reduce or illuminate any tax liabilities to the IRS that may now exits.

The cost these loans is very affordable at 3.75% and are payable over 30 years. Compare this to the costs in penalties and interest payable to the IRS. this might be a good alternative.

There is ‘lot of small print’ in this program so be careful.

You might want to secure the help of a CPA professional to help you through the process.

https://future.aicpa.org/resources/toolkit/paycheck-protection-program-resources-for-cpas#search

Here are the facts that you need to consider…

SBA’s COVID-19 Economic Injury Disaster Loan (EIDL) and EIDL Advance

The SBA is offering low interest federal disaster loans for working capital to small businesses and non-profit organizations that are suffering substantial economic injury because of COVID-19 in all U.S. states, Washington D.C., and territories.

These loans may be used to pay debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact, and that are not already covered by a Paycheck Protection Program loan.  The interest rate is 3.75% for small businesses.  The interest rate for non-profits is 2.75%.

To keep payments affordable for small businesses, SBA offers loans with long repayment terms, up to a maximum of 30 years. Plus, the first payment is deferred for one year.

In addition, small businesses and non-profits may request, as part of their loan application, an EIDL Advance of up to $10,000. The EIDL Advance is designed to provide emergency economic relief to businesses that are currently experiencing a temporary loss of revenue. This advance will not have to be repaid, and small businesses may receive an advance even if they are not approved for a loan.

SBA’s EIDL and EIDL Advance are just one piece of the expanded focus of the federal government’s coordinated response.

The SBA is also assisting small businesses and non-profits with access to the federal forgivable loan program, the Paycheck Protection Program, which is currently accepting applications until June 30, 2020.

https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sbas-economic-injury-disaster-loans-and-advance-program-reopened-all-eligible-small-businesses-and?utm_medium=email&utm_source=govdelivery

STREAMLINED PROCESS REQUIREMENTS

SBA is collecting the requested information to make a loan under SBA’s Economic Injury Disaster Loan Program to the qualified entities listed in this application that are impacted by the Coronavirus (COVID-19).

 The information will be used in determining whether the applicant is eligible for an economic injury loan. If you do not submit all the information requested, your loan cannot be fully processed.

The Applicant understands that the SBA is relying upon the self-certifications contained in this application to verify that the Applicant is an eligible entity to receive the advance, and that the Applicant is providing this self-certification under penalty of perjury pursuant to 28 U.S.C. 1746 for verification purposes.

The estimated time for completing this entire application is two hours and ten minutes, although you may not need to complete all parts. You are not required to respond to this collection of information unless it displays a currently valid OMB approval number.

https://disasterloanassistance.sba.gov/s/contact-us

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Need some answers on the SBA Coronavirus Relief Loan Options?… Here are your choices!

The Small Business Administration was designed to help small business.

With the challenges that COVID-19 presented …small business has had to face the reality of staying alive or even perhaps starting over. The SBA offers multiple funding options for those seeking relief.

Here is their website.

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options

I have presented for your review various alternatives small business might want to access. Great care needs to be exercised in navigating the various options.

Take your time and review your alternatives.

Paycheck Protection Program

This loan program provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program

EIDL Loan Advance

This loan advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties.

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance

SBA Express Bridge Loans

Enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly.

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/sba-express-bridge-loans

SBA Debt Relief

The SBA is providing a financial reprieve to small businesses during the COVID-19 pandemic.

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/sba-debt-relief

After you have navigated these various programs you may need the help of a financial professional.

CPA’s are trained to understand complex business funding arrangements and would also be a great resource in understanding which program might be best.  

I would suggest checking out the American Institute of CPA’s (AICPA) website as well.

They have created a separate “Coronavirus (COVID-19) resource center” that gives you access to the most up-to-date information, news, and tools to help you navigate the COVID-19 pandemic.

https://future.aicpa.org/resources/toolkit/aicpa-coronavirus-resource-center

As discussed above the most popular program currently under discussion through the U.S. Small Business Administration (SBA) is the Paycheck Protection Program (PPP).

 It wasdesigned to provide access to funding so businesses can keep paying their employees and other expenses such as health insurance premiums, rent or mortgage payments and utilities.

The AICPA also designed a very robust website designed to help. This important financial relief is designed to help small businesses return to being fully operational quicker once conditions improve.  

https://future.aicpa.org/resources/download/paycheck-protection-program-loan-forgiveness-services-matrix

This AICPA webpage is continually updated for changes to loan programs and program development.

Check back and keep up to date with this vital resource.

https://future.aicpa.org/topic/covid-19/cares-act