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PPP Funds Still Available, Loan Forgiveness Application Released

By SEMA Washington, D.C., Staff

The U.S. Small Business Administration’s (SBA) Paycheck Protection Program (PPP) still has money available for loans. The two-year SBA loans at a 1% annual interest rate are issued through banks and local lenders. Payments do not begin for 6 months and the SBA will forgive that portion of the loan used to cover payroll, rent, mortgage interest, and utilities for a period of eight weeks if a small business retains its employees and payroll levels. Visit SBA PPP Loans for more information.

The SBA and U.S. Department of the Treasury are under pressure to change certain PPP loan requirements to provide businesses with more flexibility. SEMA and other groups representing small business are advocating for government officials to lower the requirement that businesses spend 75% of the amount forgiven by the SBA on payroll-related costs. It is also important that the federal government extend the time frame that small businesses have to use PPP funds. For example, giving companies the option to start the eight-week clock later as the business is getting closer to full-time work. SEMA also supports extending the period for paying back the loan, from two years to five years. 

The SBA and Treasury Department released the PPP loan forgiveness application and instructions on how borrowers may seek forgiveness of a portion of the loan. The SBA will also soon issue regulations to further assist borrowers as they complete their applications.

The loan forgiveness application and instructions include several measures to reduce compliance burdens, including:

  • Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles.
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan; and
  • An exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined.

In other news, the SBA’s emergency Coronavirus disaster loan assistance program is now limited to U.S. agricultural businesses. Eligibility has been rationed until program funds are replenished by the U.S. Congress. Disaster loans of up to $2 million at 3.75% annual interest can be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact, with the first $10,000 being a forgivable grant.

For more information, contact Stuart Gosswein at