Great News for PPP Loans $50,000 or Less

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.

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

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.

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.

  • Rick Krueger
  • 10/9/2020