PPP Forgiveness for Loans of $50,000 and Under Streamlined

After extensive advocacy by bankers and trade associations, including WBA, SBA released this evening a streamlined loan forgiveness application for PPP loans totaling $50,000 or less. This would apply to about two-thirds of all PPP loans. 

Form 3508S, the two-page application, includes certifications from the borrower but does not require calculations to be submitted with the application. Applicants still must submit documentation verifying forgivable payroll and non-payroll expenses. Borrowers are further required to retain the documentation supporting their certifications for six years, but do not need to submit it. 

A borrower that uses SBA Form 3508S is exempt from any reductions in the borrower’s loan forgiveness amount based on reductions in full-time equivalent (FTE) employees (section 1106(d)(2) of the CARES Act) or reductions in employee salary or wages (section 1106(d)(3) of the CARES Act) that would otherwise apply. 

The interim final rule provides that when a borrower submits SBA Form 3508S or lender’s equivalent form, the lender shall: i. Confirm receipt of the borrower certifications contained in the SBA Form 3508S and ii. Confirm receipt of the documentation the borrower must submit to aid in verifying payroll and nonpayroll costs, as specified in the instructions to the SBA Form 3508S. As has always been the case, providing an accurate calculation of the loan forgiveness amount is the responsibility of the borrower, and the borrower attests to the accuracy of its reported information and calculations on the Loan Forgiveness Application. The borrower shall not receive forgiveness without submitting all required documentation to the lender. 

For all PPP loan forgiveness applications, SBA also provided guidance on lender responsibilities when borrowers apply for forgiveness of costs exceeding the PPP loan amount. In these cases, the lender should confirm that it received the borrower’s documentation and, if applicable, confirm the borrower’s calculations “up to the amount required to reach the requested Forgiveness Amount.”‌ 

Form 3508S

Instructions for Form 3508S  

Interim final rule

By, Eric Skrum