SBA Rolls Out Major Updates to PPP
LOUISIANA REALTORS • June 17, 2020
The Small Business Administration and U.S. Treasury Department on Wednesday rolled out major updates to the Paycheck Protection Program, offering automatic forgiveness for certain independent contractors and creating a broader application form for forgiveness.
Specifically, the updated forms clarify that the “owner compensation” amount automatically forgiven for borrowers who use a 24-week covered period, as opposed to the original eight-week period, is equal to 2.5 times their average monthly net income. This means independent contractors with a 24-week loan can have the full amount automatically forgiven under the new guidelines. The amount of forgiveness for borrowers who choose an eight-week period remains unchanged.
Borrowers who received their PPP loans before June 5 can opt for either an eight- or 24-week period in which to use their loan; borrowers who received their loans after that date must use a 24-week period. The new forgiveness forms reflect a 60% requirement for payroll expenses, down from the original 75%.
Additionally, the agencies created a streamlined “EZ Forgiveness Application” for borrowers who:
- 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 as a result of health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than 25%.
“NAR has been working closely with congressional leaders to loosen forgiveness requirements,” says Shannon McGahn, senior vice president of government affairs for the National Association of REALTORS®. “Small-business owners don’t have the resources to hire lawyers and accountants like large companies, and they shouldn’t be burdened with paperwork and red tape at a time when they’re trying to stay afloat. These new guidelines should go a long way to help.”
The deadline to apply for a PPP loan is June 30. The program still has funding available and will close at the end of the month unless Congress acts to extend it.
More information:
Association emphasizes lower monthly expenses, more housing options and practical relief for Louisiana families.
Want Your Teen to Own a Home Someday? Start Talking Money Now Teens may not be thinking about mortgage rates or down payments just yet, but the money habits they’re building now can follow them for years. And 88% of teens surveyed by Fannie Mae and Junior Achievement said they want to own a home someday. This week’s Consumer Guide: Talk to Your Teens About Money and Homeownership makes those conversations a little easier, covering everything from credit scores and budgeting to debt, renting versus owning and saving for that eventual down payment. So yes, you may have to interrupt the doomscrolling. But helping teens get smarter about money today could put them in a much better position to get the keys to a home of their own down the road. Download all of NAR’s Consumer Guides in English or Spanish at facts.realtor. For ease of reference, below is a list of the most recent guides: NEW: Teen Financial Literacy Fraud Red Flags Helping Family Members Become Homeowners Prepare Your Home for Hurricane Season Condominium Insurance Thank you for your continued engagement with the “Consumer Guide” series and for sharing the resources with prospective clients to ensure they have the information they need to find success in their home buying or selling journey. Remember that these guides are for informational purposes only and are not meant to enact or change any existing NAR policy. The next Consumer Guide, scheduled for publication on Oct. 21, will cover winter cold and storm preparedness.
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