Key Highlights
- Small Business Administration (SBA) and US Treasury Department announced new “short-form” forgiveness application for PPP borrowers with loans of $50,000 or less
- Short-form is simpler for eligible borrowers and helps reduce processing time for lenders
The Small Business Administration SBA) is currently processing forgiveness applications for small borrowers from the Paycheck Protection Program (PPP).
The good news is that the SBA and US Department of Treasury recently announced that a new simplified “short-form” forgiveness application is available to small PPP borrowers. “Smal”l is defined as borrowers who had loans of $50,000 or less. And the new forgiveness application is Form 3508S.
This 3508S forgiveness form is one and a half pages long and requires that the borrower certify that the amount they are seeking in forgiveness was spent accordingly with PPP rules.
Borrowers must submit documentation to their lender confirming the following:
- Payroll costs
- Employee numbers
- Business mortgage interest payments
- Rent and utility costs for the covered period
Importantly, borrowers with loans less than $50,000 using Form 3508S are exempt from PPP rules requiring that borrowers maintain the number of “Full Time Equivalent” employees and not reducing their employee wages. In other words, small loan borrowers using the new Form 3508S are eligible to have their full PPP loan amount forgiven regardless of economic circumstances that may have kept them from meeting one or both these program requirements.
Small loan PPP borrowers have 10 months from the end of their covered loan period to submit the Form 3508S Loan Forgiveness Application and the accompanying required documents to their lender. Lenders have 60 days to determine the substantiated validity of the loan forgiveness request.
Click for a copy of the Paycheck Protection Program Loan Forgiveness Application Form 3508S:
https://home.treasury.gov/system/files/136/PPP-Loan-Forgiveness-Application-Form-3508S.pdf
Thanks to the Small Business Administration and the US Department of Treasury.
Also read: How Has Covid-19 Already Impacted the Real Estate Market?, Mortgage Lenders Aren’t Taking Any Chances, COVID Bailouts Improving BUT Nearly 3M Borrowers NOT Recovering
