The Economic Aid Act of 2020 provided an easier path to forgiveness for borrowers with PPP Loans of $150,000 or less and expanded the covered expenses eligible for forgiveness for PPP loans of any amount.
For PPP Loans of $150,000 or less, borrowers are now eligible for forgiveness if they sign and submit a certification to the lender. The SBA’s new certification form only requires borrowers to:
- Provide a description of the number of employees the eligible recipient was able to retain because of the covered loan; and
- Provide an estimated amount of the covered loan amount spent on payroll costs
Borrowers with PPP Loans of $150,000 or less won’t be required to submit any application or documentation beyond the certification. However, they will be required to retain employment records related to the certification for 4 years and all other documents related to the certification for 3 years.
The Economic Aid Act also changed the definition of the Covered Period for forgiveness. Under the new definition, borrowers can choose a Covered Period that is any date that occurs during the period:
- Beginning on the date that is 8 weeks after the date of disbursement; and
- Ending on the date that is 24 weeks after the date of disbursement
Finally, the Economic Aid Act added new categories of eligible expenses, including certain operations expenditures, property damage costs, supplier costs, and worker protection expenditures.