More Flexibility Granted for PPP Loans
Updated information on PPP Loan forgiveness
Goldenwest Credit Union is proud to be the Paycheck Protection Program (PPP) lender for more than one thousand small businesses. We are grateful for the opportunity to provide access to critical funds that are helping sustain local business owners, and their employees, during the COVID-19 pandemic.
The new Paycheck Protection Program Flexibility Act (PPPFA) signed-in to law on June 5th introduced legislation that modifies the original program, including:
- Payroll funding requirements reduced from 75% to 60%. The percentage of PPP Loan funds that can be allocated for rent payments, mortgage interest payments, utilities, and interest loans has increased from 25% to 40%.
- Time period to allocate funds expanded from 8 to 24 weeks. PPP borrowers can apply for loan forgiveness for up to 24 weeks after the disbursement of the funds, but no later than December 31, 2020.
- Deadline extended through December 31st to rehire workers; rehiring requirements modified. The payroll calculation used in the borrower's original PPP Loan application will continue to apply to the forgivable amount. However, the original deadline of June 30th to rehire workers is now extended until December 31, 2020. Furthermore, the provisions have changed to allow exceptions for reduced headcount if an employer is able to demonstrate an inability to return to the same level of business activity, or demonstrate an inability to hire similarly qualified employees on or before December 31, 2020.
- Repayment period extended from 2 to 5 years. Should the PPP Loan or a portion of the PPP Loan not be eligible for forgiveness, borrowers have up to five years at the 1% interest rate to repay the loan.
PPP Loan borrowers should be diligent in keeping accurate payroll and accounting records to maximize their loan forgiveness amount. All eligible expenses should be tracked and recorded with accompanying documentation during the entire 24-week time period to allocate funds. Consult with your tax advisor, legal counsel, accountant, and/or payroll service to assist your business when necessary. Goldenwest will contact borrowers with additional instructions on how to submit your PPP Loan forgiveness documents.
The SBA has provided two different loan forgiveness applications for borrowers. Both applications give borrowers the option of using the original 8-week period or the extended 24-week covered period.
PPP Loan borrowers must select, complete, and submit one of the applications:
- Full Loan Forgiveness Application Packet (Form 3508); OR,
- EZ Loan Forgiveness Application Packet (Form 3508EZ).
Borrowers electing to use the EZ Loan Forgiveness Application must meet ONE or more of the following conditions:
- You are self-employed and have no employees; OR
- Your business did not reduce salaries or wages of your employees by more than 25%, and did not reduce the number or hours of your employees; OR
- Your business experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of your employees by more than 25%.
PPP Loan borrowers should review the instructions in the packet, and return the completed application via email to COVID19relief@gwcu.org with a subject line of FORGIVENESS APPLICATION with your business name (i.e., FORGIVENESS APPLICATION Smith's Lawn Service, LLC).
Download a PDF version of the Full Forgiveness Application Packet.
Download a PDF version of the EZ Loan Forgiveness Application Packet.