The U.S. Small Business Administration (SBA), in consultation with the Treasury Department, has released a simpler loan forgiveness application for business owners who received Paycheck Protection Program (PPP) loans of $50,000 or less.
The new application – Form 3508S (linked below) – is one-and-half pages long, and requires the borrower to certify that the amount they are seeking forgiveness for was spent in accordance with the PPP requirements. Documentation must be submitted to their lender confirming payroll costs, employee numbers, business mortgage interest payments, rent and utility costs for the covered period. The new forgiveness application is simpler for eligible borrowers to use, and will reduce the processing time on the part of the lenders.
In addition, borrowers who use the 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, along with the 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. The SBA is currently processing forgiveness applications provided by the SBA lenders. Borrowers have 10 months from the end of their covered period to submit the Loan Forgiveness Application and accompanying documents to their lender, and the lender then has 60 days to make a determination on the loan forgiveness request.
InBestmetnts views this as a positive development but more needs to be done. We hope our leaders will put politics aside and get back to the negotiating table to hammer out a coronavirus stimulus package that will help struggling families, businesses, renters, and landlords.