Small-business owners won’t have to pay back their federal pandemic relief loans even if they don’t rehire all of the workers they laid off, the Trump administration affirmed, effectively eliminating a rule that many borrowers had feared would leave them stuck with a large debt.
The Treasury Department and the Small Business Administration, the program’s manager, released new loan forgiveness forms on Wednesday with a “safe harbor” option. Borrowers can simply affirm they were unable to operate “at the same level of business activity” they had before the crisis because of government requirements or safety guidance, including social distancing rules.
Those borrowers can have their loans fully forgiven if they meet the program’s other rules, including a requirement that they spend at least 60 percent of their aid money on payroll. The change follows a new law that loosened many terms of the Paycheck Protection Program loans.
For some leery borrowers, the recent changes were a major turnaround. George Evageliou, the founder of Urban Homecraft, a custom woodworking company in Brooklyn, had left his $192,000 loan untouched because he feared he would not be able to spend it in compliance with the program’s rules.
But the changes — in particular an expansion giving borrowers 24 weeks to spend their aid money — gave him time to safely restart operations and recall his laid-off employees. His staff began returning to work last week.
“We’re feeling pretty good about our decision to sit tight and let the law change,” Mr. Evageliou said. “We’re just so grateful for the help this grant will give us.”
On Wednesday, Hertz reversed course on its plan to sell $500 million in shares, saying it had suspended further sale of its stock “pending further…