The smallest small business may be able to avoid using additional documents, worksheets, and wage / tax forms.
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A bipartisan law called "Paycheck Protection Small Business Forgiveness Act" was introduced in the Senate that allows small businesses that have received a $ 150,000 or less loan from the Paycheck Protection Program (PPP) to submit a unilateral one Obtain forgiveness automatically. The certificate form would be limited to one page, and the small company would only confirm that the loan is eligible for forgiveness and that the company meets the requirements of the CARES law paycheck protection program.
Legislation would be beneficial for the smallest small businesses that received PPP loans of $ 150,000 or less, as well as for banks that lend to smaller PPP borrowers, as there is less paperwork and documentation requirements for all PPP award requests required are. These "smaller" small businesses, sometimes referred to as "micro businesses", generally do not have internal accountants and payroll departments that they can rely on for professional support from PPP, and hiring an external accountant or lawyer to provide professional services is nothing what they do regularly. These smaller PPP borrowers include a significant number of sole traders, independent contractors and one-person operators, as well as people who have a day job and a side job.
Related: The CEO of a company that owns more than 100 Wendy allegedly used $ 1 million in PPP loans for a new home in Montana
Legislators have said that the bill would cover 85 percent of PPP borrowers, but only 26 percent of committed funds. Larger small businesses that have received over $ 150,000 in loans make up the vast majority of the funds borrowed under the PPP program (74 percent), and they still need to fill out the standard PPP loan application and finance and submit proof of salary. These larger small businesses, which have received $ 150,000 PPP loans, have greater internal resources and typically work with external accountants and attorneys who can assist with their PPP award requests.
Arizona Democratic Senator Kyrsten Sinema was the original legislative co-sponsor and was a small business lawyer during the pandemic. In a statement, she said, "Completely forgiving Arizona small business PPP lending provides the necessary economic security to local employers who have suffered no fault of their own while protecting Arizona jobs and paychecks."
Recent SBA data released on June 30 shows that PPP loans have supported more than 51 million jobs. However, if PPP forgiveness is not realized for small businesses, PPP will simply become a debt burden for borrowers who are still trying to weather the storm.
Related topics: SBA and Treasury release names of PPP loan recipients
The law is pending in the Senate and is supported by small businesses, the American Bankers Association, and all 51 state bankers' associations. Banks and other lenders have been encouraged by Congress and the SBA to lend to the smallest small businesses. They are also responsible for processing PPP requests for the same loans. By reducing document and paperwork requirements for the smallest small businesses, banks that have turned to these borrowers also benefit by being able to easily meet their own internal PPP issuing process and documentation requirements.