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June 2020

Small Business Administration Releases New and Improved Paycheck Protection Program Loan Forgiveness Applications

Last updated June 19, 2020

On June 17, 2020 the Small Business Administration (the “SBA”) released two important Paycheck Protection Program (“PPP”) documents. The first is a new “EZ” PPP loan forgiveness application, together with its instructions, available for certain borrowers to use. The second is an updated long-form PPP loan forgiveness application, together with its updated instructions, to carry out the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”).

Borrowers can use the new EZ PPP loan forgiveness application if they satisfy at least one of the following criteria:

  1. The borrower is a self-employed individual, independent contractor, or sole proprietor who did not have employees at the time of its PPP loan application and did not include any employee salaries in computing its maximum loan amount;

  2. The borrower (a) did not reduce annual salary/wages of any employee (considering only those who did not receive an annualized rate of pay in excess of $100,000 in any 2019 pay period) by more than 25% during the Covered Period or Alternative Payroll Covered Period when compared to the period between January 1, 2020 and March 31, 2020, and (b) did not reduce the number of employees or average paid hours of employees between January 1, 2020 and the end of the Covered Period (ignoring certain reductions due to an inability to rehire or due to the employee refusing hours); or

  3. The borrower (a) did not reduce annual salary/wages of any employee (considering only those who did not receive an annualized rate of pay in excess of $100,000 in any 2019 pay period) by more than 25% during the Covered Period or Alternative Payroll Covered Period when compared to the period between January 1, 2020 to March 31, 2020, and (b) was unable to operate its business during the Covered Period at the same level of business activity as before February 15, 2020 due to compliance with federal health and safety requirements or guidance related to COVID-19 (the “Compliance Safe Harbor”).

The SBA also updated the long-form PPP loan forgiveness application to implement the changes made by the Flexibility Act. The revised long-form application includes the following changes:

  • The Covered Period is now 24 weeks, unless the borrower received the PPP loan before June 5, 2020 and elects to use an 8-week Covered Period;

  • The maximum amount of per-employee cash compensation eligible for forgiveness is $15,385 for an 8-week Covered Period and $46,154 for a 24-week Covered Period; and

  • The forgiveness application now includes the Compliance Safe Harbor as well as other changes to conform to the Flexibility Act.

Our prior alert discussing the changes made by the Flexibility Act may be found here, and our alert discussing the SBA’s recent revised guidance issued to implement the Flexibility Act can be found here.

CSG will continue to track any additional PPP legislation or guidance. If you have any questions regarding any federal or state economic assistance programs, please reach out to your CSG attorney.

For additional information pertaining to the coronavirus outbreak, please visit CSG's COVID-19 Resource Center.


This publication contains general information on recent legal developments and is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Attorney Advertising. Prior results do not guarantee a similar outcome.

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