Biden administration announces streamlining of paycheck protection program under White House Covid plan

Photo of Olivia LynchPhoto by Michael SamuelsPhoto by Zachary Schroeder

On September 9, 2021, President Biden announced a six-pronged plan to tackle COVID-19, which Crowell has previously discussed here. One aspect of the plan is to protect the economy, one aspect of which is streamlining the process for canceling loans from the existing Paycheck Protection Program (“PPP”).

Under the P3, small business loans can be canceled if the business demonstrates that it has used the loan funds to keep its employees on the payroll. In order to receive a discount, all borrowers had to complete the loan forgiveness request beforehand and submit it to their PPP lender. Under the new streamlined process, for loans of $ 150,000 or less, the SBA will send a pre-filled application form to the borrower, who will review, sign and return the form to the SBA. SBA then works directly with the lender to complete the forgiveness process.

The SBA has already started using this new process since August 4, 2021. Lenders are required to register for the program through https://directforgiveness.sba.gov, with more than 600 banks already opting for direct forgiveness. The SBA estimates that 6.5 million small businesses would be eligible for the simplified process. The SBA says more than 820,000 small businesses have already applied for a rebate using the new process, with borrowers spending an average of 6 minutes on the application and 60% of applicants completing the process on their cell phones.

Crowell will continue to monitor and provide updates regarding the use of this streamlined process.

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