Mnuchin, Carranza Offer Clarifications on PPP Forgiveness Process

During a Senate Small Business Committee hearing today, Treasury Secretary Steven Mnuchin confirmed that, pursuant to the Paycheck Protection Program flexibility law passed last week, borrowers that use less than 60% of their PPP loan amount for payroll costs during the forgiveness covered period will still be eligible for partial loan forgiveness. Treasury and the Small Business Administration are expected to issue additional guidance related to the flexibility law in the coming days.

Meanwhile, Mnuchin and SBA Administrator Jovita Carranza signaled that they are working on updating the loan forgiveness form to incorporate the “safe harbor” changes found in H.R. 7010, the Paycheck Protection Program Flexibility Act. Mnuchin noted that these changes would make it “significantly easier” for borrowers to apply for forgiveness and reduce the overall size of the application.

Mnuchin also directed borrowers to third-party calculators that can help them complete their applications “in 15 minutes, so you don’t need to go hire lawyers and accountants.” He emphasized that “we want to make this easy for people to do, and now with this safe harbor, most people will have the benefit of that.”