The U.S. Small Business Administration has released the much-anticipated application and instructions for how Paycheck Protection Program borrowers can see their loans forgiven.
The program was developed through the more than $2 trillion Coronavirus Aid, Relief and Economic Security Act and began with a $349 billion pot. After borrowers depleted those funds in about two weeks, federal authorities replenished the program with $310 billion.
While business owners sought the funds for an infusion of cash that could potentially convert to a grant, questions lingered as to how exactly lenders and the SBA would determine whether borrowers met the terms for forgiveness. The agency rolled the program out quickly and has been updating guidance since the PPP came online.
The document released Friday was created to inform borrowers how to apply for forgiveness of their PPP loans, the SBA said. The agency released the form in consultation with the U.S. Department of the Treasury.
The SBA said it would soon issue regulations and guidance to further assist borrowers as they complete their applications. Lenders could also look for guidance on their own responsibilities, the SBA said.
From the start, the agency has said 75% of PPP funds had to be directed toward payroll expenses, while the remainder could be spent on overhead costs like mortgage interest, rent and utility costs.
The application includes a worksheet that details how to calculate the amount of the loan that can be forgiven and provides a summary of costs eligible for forgiveness. The SBA also provided a list of documents borrowers have to submit with their forgiveness applications.
Through the first round of the PPP, the SBA said lenders disbursed about $342.28 billion across 1.66 million loans. As of Friday evening, the SBA reports lenders approved $194.76 billion across 2.75 million applications.