The SBA continues to share PPP loan forgiveness information. Here’s what we know about the streamlined loan forgiveness application released by the SBA on October 8, 2020.
Key insights
- The SBA released a streamlined PPP loan forgiveness application form on October 8, 2020.
- The new form requires fewer calculations and less documentation.
- CLA can help you navigate the PPP loan forgiveness process.
On October 8, 2020, the Small Business Administration (SBA) released a streamlined loan forgiveness application for Paycheck Protection Program (PPP) loans totaling $50,000 or less. This is great news for a large number of borrowers, as loans totaling $50,000 or less make up about two-thirds of all PPP loans.
Get the help you need with PPP loan forgiveness
Who can use the new PPP loan forgiveness form?
The new two-page application, Form 3508S, is available to borrowers that meet two criteria: (i) total PPP loan amount received by the borrower was $50,000 or less and (ii) total of all PPP loan amounts received by the borrower and its affiliates was less than $2 million.
The new form has advantages over the previously released forms, including the following:
- Form 3508S requires fewer calculations
- Less documentation is required
- Borrowers using Form 3508S are exempt from reductions in loan forgiveness stemming from reductions in full-time equivalent employees or from reductions in salaries or wages
Consider these areas when completing the loan forgiveness application
Despite the simplification, there are a few items that borrowers still need to focus on:
- The application includes borrower certifications
- The forgiveness amount entered on the form is still based on the amount of eligible payroll and nonpayroll costs as outlined in the instructions
- Borrowers are required to submit documentation of those eligible costs to their lender
- Borrowers must retain other required documentation for six years (but that documentation is not required to be submitted to the lender)
All in all, this is a big step forward for loans of $50,000 or less and should make the forgiveness process much simpler than it would otherwise be.
How we can help
CLA can help you navigate PPP forgiveness. Whether you need just a short consultation or full support, we have a forgiveness package option for you.