SBA simplifies loan forgiveness process for borrowing of $150,000 or less
If you have a Paycheck Protection Program (PPP) loan under $150,000, this news is for you. The Small Business Administration (SBA) is launching a portal where you can apply for PPP loan forgiveness directly. This new “direct forgiveness” program aims to streamline and simplify the PPP forgiveness process and “help rush relief” to the small businesses that need it most.

The portal will open on August 4, 2021.

PPP direct forgiveness details:
Borrowers will be able to apply for direct forgiveness at the SBA portal starting on August 4, 2021. In order to work through the application process, you will need: 

  1. Your EIN, SSN, or ITIN number
  2. Your SBA Loan Number
  3. Be prepared and know which covered period you used (8 weeks, 24 weeks, or other) 
  4. Your gross receipts amount for 2019
  5. Your gross receipts amount for 2020
  6. The number of employees you had when you applied for your PPP loan
  7. The number of employees you have today
  8. The amount of your PPP loan you spend on payroll
  9. The amount you are requesting for forgiveness

Please note that the SBA Loan Number is not same as Lender's Loan Number:
This is a 10-digit number that was assigned by the SBA. You can find this number on your loan agreement or loan closing documents; if you can’t find it, contact the lender or call the SBA at 1(877)552-2692. Keep in mind that this is not the Lender PPP Loan Number, which was assigned by your lender. The SBA Loan Number was assigned by the SBA. 

As you work through the application within the portal, the system may request that you upload certain documents—however, in many cases, you will not be required to submit any documentation.

The SBA has created a step-by-step guide to the forgiveness application process, if you need help or hit a snag, call the helpline at: 1(877) 552-2692, Monday through Friday, 8 A.M. – 8 P.M. EST.

Second-draw loan borrowers with loans of $150,000 or less were given the option to self-certify that they met the 25% gross receipts threshold when they took out their loans. Those that took this option must submit documentation proving they meet the 25% gross receipts reduction test when they submit their application for loan forgiveness.

These borrowers may now satisfy this requirement using a new COVID-19 Revenue Reduction Score. The score uses a variety of data inputs including industry, geography, and business size. The scores will be accessed through the SBA. Lenders who are processing applications will have access to this data, as will borrowers who are applying directly with the SBA-provided portal for loan forgiveness. At this point, there is no separate website to access scores, or information on the scores.

If the score validates at least a 25% gross receipts reduction, no additional documentation will be required. But if the score does not support a 25% gross receipts reduction, borrowers can provide additional documentation to the lender or the SBA to prove the requisite revenue.

The FTB has confirmed that they will follow the new interim final rule issued by the SBA allowing second-draw PPP loan borrowers to use a COVID-19 Revenue Reduction Score to prove they meet the 25% gross receipts reduction test. Under AB 80, California taxpayers must prove that they meet this test to take deductions for amounts paid with forgiven PPP debt on their California returns.

For more information on AB 80 and the FTB’s conformity to federal guidelines on the gross receipts test, go to:

To view the new interim final rule from the SBA, go to:

As always, we will keep you informed on all the important updates to the latest tax legislation as the Treasury continue to release new rules and guidance. Please don't hesitate to contact one of us or reach out to our COVID-19 team at should you have any questions. Take care and stay safe.

Our 2020-2021 tax planning guide:

This newsletter is based on interpretation of the ARPA released on March 11, 2021. Your judgement and interpretations of the Act may be necessary. This alert is provided for information purposes only and does not constitute accounting and tax advice. Please contact your MGGGY LLP accountant for additional assistance.

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