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Paycheck Protection Program (PPP) Loan Forgiveness Application Released
5/29/2020
Paycheck Protection Program (PPP) Loan Forgiveness Application Released
In consultation with the Department of the Treasury, the Small Business Administration (SBA) released the PPP Loan Forgiveness Application and detailed instructions for the process of applying for forgiveness under the CARES Act.
The SBA also released an interim final rule so borrowers and lenders are knowledgeable of requirements governing the forgiveness of PPP loans. That guidance can be found HERE.
In this guidance the SBA clarified that they may review the following information from your application:
- Loan amounts and use of proceeds – Did you calculate your loan amount correctly?
- Loan forgiveness amounts – Were you entitled to the amount claimed in your application?
- Eligibility as a borrower – Were you in fact eligible for the loan and was the information in your application correct?
Additional guidance included:
- The SBA may review any borrower at any time and requires you to maintain records for 6 years after the loan is forgiven or paid in full.
- Borrowers will be able to provide additional information to either the bank or SBA if your loan application or forgiveness application is rejected.
- Clarifying that there will be an appeal process within 30 days if you receive a negative determination.
- The lender must issue a decision to the SBA on a loan forgiveness application no later than 60 days after you receive receipt of a completed loan forgiveness application.
The guidance however did not address:
- Elimination of the 75/25 Rule
- Extension of the eight-week time period in which PPP funds must be spent to qualify for forgiveness.
*These issues are focal points for many pieces of legislation currently being considered in Congress.
Under these new procedures, you must request the forgiveness of PPP loan proceeds by filing SBA Form 3508. This application contains four components:
- PPP Loan Forgiveness Calculation Form
- PPP Schedule A
- PPP Schedule A Worksheet
- PPP Borrower Demographic Information Form
*As a borrower, you are required to submit items (1) and (2) to your lender.
This document will help you and your small business seek forgiveness upon the conclusion of the eight week covered period under the CARES Act, which begins upon distribution of the loan.
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