This week, the American Small Business Association launched a portal designed to expedite loan forgiveness for small business owners who borrowed $150,000 or less from the Paycheck Protection Program (PPP) during the pandemic. If you are a business owner who spent 60% of your loan on payroll, you likely qualify. Here’s what you need to know.
Which businesses qualify for PPP loan forgiveness?
As part of the CARES Act, the $953 billion Paycheck Protection Program provided small business loans with generous terms: if your business spent 60% of the loan on eligible payroll costs and no more than 40% on eligible payroll costs, the loan may be forgiven (more details on eligibility for PPP loan forgiveness can be found here).
The portal can process these claims in less than 72 hours
The portal was created to address an overflow of loan forgiveness requests from small business owners, the vast majority of whom have loans under $150,000. Since many borrowers complained that the process is too complicated and time-consuming, the portal is intended to be a one-stop shop to expedite forgiveness to less than 90 days and, in some cases, less than 72 hours.
In lieu of documentation, if you are a second-draw borrower with loans under $150,000, you can use the portal’s “COVID Health Score,” an automated process that verifies your business’s revenue using public and private data from sources such as foot traffic and businesses. – Commertial expenses, by Inc.com. If your claim is flagged by this automated process, you will need to upload documentation showing that your business lost 25% of its revenue in 2020 compared to 2019.
However, there is a drawback with the portal. While the Small Business Administration (SBA) is working on behalf of banks to process these claims, many larger banks have opted out of the portal, preferring to handle loans directly. according to the New York Times. If you cannot find your lender on the portal, you will need to apply directly through them. Your lender should be able to provide guidance on how to complete SBA Form 3508, SBA Form 3508EZ, SBA Form 3508S, or a lender’s equivalent.
How to Apply for Loan Forgiveness Using the Portal
You can access the portal hereand here a user guide on how to use it. You can also call (877) 552-2692 or visit www.sba.gov/relief for more information.
