May 21, 2020

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Forgiveness just got easier

This week, the Small Business Administration (SBA) released the Paycheck Protection Program (PPP) forgiveness application, along with clarifications on the rules for forgiveness. It appears that the SBA is trying to make forgiveness easier for borrowers. In the same vein, we’re hearing that the Congress and Senate are both trying to pass legislation in the coming weeks that will extend the deadline for application as well as the covered period past eight weeks. 

Here’s a quick rundown of what’s changed: 

  1. You can now exclude employees who’ve resigned, chosen not to return to work, or been terminated with cause from payroll and still have your loan fully forgiven. 
  2. An alternate covered period can now start on the first pay date after loan disbursement versus the day of loan disbursement for businesses with bi-weekly or more frequent pay schedules. 
  3. Instead of having to pay at least 75% an employee’s total wages from Q1, you are now required to pay them at least 75% of their average Q1 wages. 
  4. Seasonal businesses now have an option for an additional lookback period. 

You can download this guide for a deeper look at what’s changed. As a reminder, you can also check our step-by-step breakdown of what to do once you’ve gotten a PPP loan, which includes a calculation walkthrough for how much you should pay your employees to ensure loan forgiveness.

The money is moving slowly 

According to a report by the American Action Forum, the PPP loan program still has about $146 billion available for disbursement. That’s about 22% of the total $659 billion in funds. The report also highlights some other interesting trends: 

  • Loan disbursements are happening at a slower pace in round two.  
  • The average loan size is decreasing, indicating that the money is going to smaller businesses. 
  • The number of lenders has stabilized. 

It’s anyone’s guess as to why the funds are being disbursed less quickly—potentially a combination of slowing demand, the rate of repayment or returns from early loan recipients, and greater checks on who gets the money. We believe that this presents a great opportunity for smaller businesses who are yet to take advantage of the stimulus funds. 

You can apply for a PPP loan through Gusto here. You don’t even need to be a Gusto customer.

State-specific guides to post-COVID employee benefits

As businesses start to reopen and rehire, we’ve created comprehensive guides to post-COVID employee benefits requirements: 

Our top relief options for the week:

  • Stimulus 2020
    • Stimulus 2020 is a privately-funded stimulus program intended to support America’s local businesses. They are offering $1,000 investments and curating stimulus packages designed to help American businesses stay afloat in this time of crisis. 
    • More Information
  • Hairdressers at Heart
    • Licensed professional hairstylists, nail techs, salon owners, and educators can apply to receive one of 230 relief checks totaling up to $1,000 each to assist in their pandemic relief and recovery.
    • More Information
  • Joan Mitchell Foundation Emergency Grant Program – Artist Relief
    • Artist Relief will distribute $5,000 grants to artists facing dire financial emergencies due to COVID-19. 
    • More Information
  • See more relief options

On our radar

Want more small business news and resources? Check out past editions in our archive.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.

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