The Small Business Administration recently acted to provide relief to borrowers that have taken out PPP loans and seek the loan’s forgiveness. This change comes after Congress has not yet moved forward on an automatic forgiveness bill, which would ease the log-jam currently being faced by the federal government. The SBA states that roughly 67% of all loans were $50,000 or less, representing the bulk of loans received by businesses.
If you received a PPP loan for $50,000 or less, you are now eligible to apply for loan forgiveness using a simpler application—Form 3508S—released by the Treasury Department and SBA. This new process cuts down your workload by eliminating the salary reduction calculation and full-time equivalence (FTE) valuation.
You will still be required to certify that your funds were used for eligible expenses, payroll costs were at least 60% of the forgiveness amount, and you met the owner-employee limitations and caps. Documentation may still need to be provided to substantiate your forgiveness application and retained for six years after the forgiveness date.
There are few lenders currently accepting these applications, but you should check with your lender to find out if and when they are ready.
Please contact PPA at firstname.lastname@example.org if you have any questions.