When the federal government began the Paycheck Protection Program in April, one rule was clear to small-business owners bedeviled by its chaotic and messy start: If most of the loan money was used to pay employees, the debt would be forgiven. But as the program enters its loan-forgiveness phase, those owners — and their lenders — are finding out that although the principle may have been simple, its execution is anything but, the New York Times reported. Many lenders have yet to start accepting applications from borrowers to have the loans forgiven. They are waiting to see whether Congress will pass a proposal to automatically forgive debt of less than $150,000, the bulk of the loans made under the program. Read more.
In related news, the Small Business Administration (SBA) and Treasury Department announced that they are simplifying the loan-forgiveness application for Paycheck Protection Program (PPP) loans under $50,000, The Hill reported. “We are committed to making the PPP forgiveness process as simple as possible while also protecting against fraud and misuse of funds," Treasury Secretary Steven Mnuchin said on Thursday, calling for additional simplification through legislation. The simpler, two-page form businesses can fill out to have their PPP loans forgiven is meant to ease burdens on struggling small businesses. Read more.
