Updated SBA PPP loan forgiveness applications (and new EZ Form) now available. No incentive to wait to apply until December if you’ve currently got FTE levels to where they were before February 15.

Last week we wrote about the updated criteria for forgiveness of the SBA’s Paycheck Protection Act implemented by the update to that program – the PPP Flexibility Act. The SBA has now released the newly updated forms for obtaining forgiveness – the loan forgiveness application and the new Form EZ loan forgiveness application. Each of these forms include the updates incorporated by the PPP Flexibility Act.

The new EZ Form applies for borrowers in one or more of these groups:

1. Self-employed or independent contractor/sole proprietorships with no employees when the PPP loan was applied for (you didn’t file with employee salaries in your loan determination amount);
2. PPP loan recipients that didn’t lower employee salaries or wages by more than 25% during the covered forgiveness period AND didn’t lower the amount of employees or average hours paid for employees during the covered forgiveness period;
3. PPP loan recipients that didn’t lower wages or salaries of an employee by more than 25% during the forgiveness period and couldn’t operate at a level similar to that of before February 15 because the borrower was complying with OSHA/CDC or Health and human services guidance.

The covered period and submission timing has become a targeting exercise under the new forms as well. Which is a good thing for borrowers. The prior guidance and notes regarding the PPP loan forgiveness required the borrower to zero out any FTE (full time equivalent employee) reductions by June 30, 2020. The flexibility act extended that date to December 31, and the applications make that the earlier of December 31 or the date the application is submitted. So if you achieve the zeroing out and want to submit – you should, as there is no requirement that such a zeroing out continue beyond when the application is submitted – e.g., there doesn’t appear to be a requirement that if you achieve the equal FTE status on September 1 and submit then, that you’d then need to maintain that level of employment beyond September 2.