WASHINGTON –U.S. Senators Tom Udall (D-NM) and Martin Heinrich (D-N.M.) announced that the Small Business Administration (SBA) has responded to their and other Democratic Senators' request to simplify the application for small businesses seeking forgiveness from loans obtained through the Paycheck Protection Program (PPP).
After hearing from small business owners, Udall and Heinrich pressed the SBA and the U.S. Department of Treasury to revise their 11-page form, which they said was “especially burdensome, time-consuming, and costly for very small and underserved businesses, including microbusinesses, sole-proprietorships, rural and minority-owned businesses.”
“Small businesses that received PPP loans are entitled to full forgiveness if they meet the law’s requirements and owners should not be compelled to hire attorneys and accountants just to complete a loan forgiveness application,” Udall said. “I’m pleased that the SBA and Treasury responded to our request and streamlined the application process. The last thing struggling New Mexico small businesses need is an additional barrier to their survival.”
“The economic relief measures we passed in the CARES Act funds grants and loans from the SBA to provide essential support for New Mexico small businesses and nonprofits to keep their employees on the payroll and cover their expenses,” said Heinrich. “The funding for this assistance is still available, and lenders across New Mexico are ready to process applications. I am pleased to see that the SBA heeded my request for a simplified loan forgiveness application and taken steps to provide better clarity, but I still offer the services of my office if any applicant needs assistance. I encourage small business owners in need of assistance to connect with their preferred lender and get started on an application before the deadline. In the days and months ahead, I remain committed to rebuild thriving businesses and local economies across our state.”
The federal agencies published two loan forgiveness application forms: a revised full application and a new EZ application . The EZ application applies to borrowers that are self-employed and have no employees; did not reduce employee salaries by more than 25% and employee hours; or experienced reduced business activity because of COVID-19 health directives and did not reduce employee salaries by more than 25%. The EZ application requires fewer calculations and less documentation.
PPP is a $659 billion-dollar program that allows small businesses impacted by COVID-19 to apply for loans of up to $10 million. The federal government will forgive all or part of the loan if businesses meet certain requirements. Congress has eased the requirements since PPP was first enacted as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Borrowers now have the option of using the loan over 24-weeks, instead of an original 8-week period, and are now required to use only 60% of the funds toward payroll, instead of 75% as first required.
Small businesses in New Mexico may still apply for PPP loans. Approximately $147 billion in the PPP fund remains unobligated as of June 12. For information on how to apply for a PPP loan, click here.
