Updated Paycheck Protection Program (PPP) loan forgiveness guidance and forms were released Tuesday, January 19, by the Small Business Administration (SBA).
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By Tommy Greer
The guidance and forms include a simplified, one-page application for borrowers of loans for $150,000 or less – Form 3508S. The new Form 3508S includes information about the borrower’s loan amount, disbursement date, employee totals, covered period dates, amount of the loan spent on payroll, and the amount of the loan for which forgiveness is being sought. The SBA indicates that supporting documentation is not required to be submitted with the application but it is mandated to maintain payroll, and other supporting documents that could be requested during an SBA loan review or audit. However, the banks may still require the borrower to submit supporting documentation.
Two other PPP loan forgiveness applications were also released, which borrowers must submit payroll and nonpayroll documentation when applying for forgiveness:
Form 3508EZ – PPP loan forgiveness application for loans over $150,000 for which the borrower either:
a) did not reduce salaries or wages of employees by more than 25% and didn’t reduce the number of employees or paid hours, or
b) did not reduce salaries or wages of employees by more than 25% and were unable to operate at the same business level as before February 15, 2020 due to complying with certain health and safety requirements.
Form 3508 – PPP loan forgiveness application for borrowers who do not qualify to use Form 3508EZ or 3508S.
In addition, the SBA and Treasury released Form 3508D, which certain individuals must use to disclose controlling interest in an entity applying for a PPP loan.
The SBA has also released an interim final rule (IFR) that consolidated prior PPP loan forgiveness rules and changes made by The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260.
It is important to note that both the three loan forgiveness application forms and the IFR apply to first- and second-draw PPP loans.