Howard Zangwill, CPA, Managing Director of Audit and Accounting in the Oakland office.
Howard ZangwillCPA / Partnerview bio

PPP Loan Forgiveness Simplified for Most Borrowers


The Small Business Administration Simplifies
PPP Loan Forgiveness for Most Borrowers

RINA Alert - August 3, 2021 | Volume 19, Issue 15

Last week, the Small Business Administration (SBA) published new guidance intended to streamline and accelerate the forgiveness process for businesses and not-for-profits with Paycheck Protection Program (PPP) loans of $150,000 or less. Loans of $150,000 or less account for 93% of outstanding PPP loans according to the SBA.
The SBA’s direction takes effective immediately and includes:

  • A portal that will allow borrowers to apply for forgiveness through the SBA
    • On August 4th, the SBA will launch a new application portal that will allow the 2.17 million business owners with PPP loans of $150,000 or less to apply for loan forgiveness directly through the SBA instead of their banks.
      • Lenders are required to opt-in to the program here. About 600 lenders have signed up so far. 
  • The introduction of a COVID Revenue Reduction Score
    • The COVID Revenue Reduction Score (see details below) can be used at the time of forgiveness to document the required revenue reduction for second-draw PPP loans.
      • Second-draw borrowers who still must substantiate their 25% reduction in gross receipts can use a COVID-19 Revenue Reduction Score as an optional method to prove their revenue reduction (instead of providing providing tax forms, quarterly financial statements, or bank statements).
  • Deferment extension for Office of Hearings Appeals (OHA) Appeals
    • The new SBA guidance also includes a provision that provides a deferment extension from the SBA’s OHA. Under the revised OHA rule, an appeal petition must be filed with OHA within 30 calendar days after the appellant’s receipt of the final SBA loan review decision.

COVID 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. 
California borrowers

For California borrowers, the Franchise Tax Board (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:
Meanwhile, the SBA is supposedly working on a way to refine the loan forgiveness process for loans from $150,000 up to $2 million.  Earlier this month, the SBA announced that it will eliminate the loan necessity review for loans of $2 million or more. 
The RINACARES team will continue to monitor and keep you updated on the latest changes to the SBA’s PPP program. Please reach out to your RINA professional or contact for further information and assistance.


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