Daniel J. Munoz//June 19, 2020//
Daniel J. Munoz//June 19, 2020//
The Trump administration rolled out a much shorter and “user-friendly” application for a federal aid program aimed at propping up small businesses hit hard by the COVID-19 pandemic and ensuing recession ahead of a June 30 deadline.
Small business owners and self-employed workers will be able to fill out the new applications for the Paycheck Protection Program, a federal aid program run by the U.S. Small Business Administration, which calls for forgivable loans of up to $10 million to businesses to keep workers on the payroll.
The EZ Forgiveness Application, released on June 17 and clocking it at only three pages, is meant to help sole proprietors and self-employed workers access the loans. It will require “fewer applications and less documentation,” reads a Wednesday announcement from the SBA.
Under the Wednesday version of the EZ application, business owners have to show that they are self-employed and have no workers, that they kept pay cuts under 25 percent and did not reduce the “number or hours of their employees,” and that they saw their business suffer as a result of the pandemic. The original application from May was 11 pages long.
Meanwhile, the SBA and U.S. Treasury also released a “borrower-friendly ” five-page loan forgiveness application on the same day, in order to comply with a host of sweeping expansions to the PPP program that U.S. President Donald Trump signed into law on June 5.
Under those changes, new borrowers have more time to repay their loans – five years rather than two years. The changes also scale back how much businesses have to spend on payroll in order for loans to be forgiven from 75 percent to 60 percent. Businesses are also given more time to spend the money – six months instead of the current two months – to take pressure off employers.
The program was created as part of the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, and included $349 billion and $310 billion rounds of funding in April.
A bill moving through Congress introduced on June 18 calls for an additional round of PPP funding.
Government-mandated shutdowns across the country have frozen commerce, triggering mass furloughs and lay-offs. In New Jersey, that meant a record-high 16.3 percent unemployment rate.
But the PPP program has been fraught with complaints—lack of communication between financial institutions and government the inability for countless small businesses to actually obtain a loan, and frequent reports that the money went to publicly-traded, well-financed businesses with no need for such aid.
Dozens of publicly-traded companies have returned their loans under pressure.
And despite $17 billion having been awarded to businesses in New Jersey, a June 4 Focus NJ report found that 86 percent of New Jersey companies hadn’t received any money under the federal aid program.