PPP Forgiveness: New Short Form for Loans $50K or Less
Businesses with Paycheck Protection Program (PPP) loans of $50,000 or less can now submit a forgiveness request using a form that’s less than two pages long.
WASHINGTON – Yesterday, the U.S. Small Business Administration (SBA), in consultation with the Treasury Department, released a simpler loan forgiveness application – Form 3508S – for Paycheck Protection Program (PPP) loans of $50,000 or less to “help America’s smallest businesses.”
“The PPP has provided 5.2 million loans worth $525 billion to American small businesses, providing critical economic relief and supporting more than 51 million jobs,” says Treasury Secretary Steven T. Mnuchin. “We are committed to making the PPP forgiveness process as simple as possible while also protecting against fraud and misuse of funds.”
The new form runs less than two pages. According to the National Association of Realtors®’ (NAR), it requires the borrower to certify that it spent the forgiveness amount requested in accordance with PPP requirements, and submit documentation that confirms payroll costs, employee numbers, business mortgage interest payments, and rent and utility costs for the covered period.
Borrowers using Form 3508S are exempt from the PPP requirement that “Full Time Equivalent” employee numbers remain the same during their covered period as before the pandemic. They’re also exempt from a requirement that employee wages not be reduced.
“Thus, borrowers with loans of $50,000 or less who use the new form are eligible to have their full loan amount forgiven, even if economic circumstances kept them from meeting one or both of those requirements of the program,” according to NAR.
Since the new forgiveness application is simpler and shorter, it should also take lenders less time to approve and submit the requests.
While the federal government backs the PPP loans, private financial institutions handle documentation and paperwork. Borrowers have 10 months from the end of their covered period to submit a Loan Forgiveness Application and accompanying documents to their lender. The lender then has 60 days to make a determination on the loan forgiveness request.
SBA began approving PPP forgiveness applications and remitting forgiveness payments to PPP lenders for PPP borrowers on Oct. 2, 2020.
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