For our PPP borrowers, please contact your lender for additional resources to assist you with the forgiveness process.
The SBA recently released another PPP Loan Forgiveness Application, SBA Form 3508S, for use by PPP borrowers applying for loan forgiveness on PPP loans with a total loan amount of $50,000 or less, except for those borrowers that together with their affiliates received loans totaling $2 million or greater. This application is the streamlined application that has been discussed for several months.
Per the SBA, "Form 3508S requires fewer calculations and less documentation for eligible borrowers. Borrowers that use Form 3508S are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages. Form 3508S also does not require borrowers to show the calculations used to determine their loan forgiveness amount."
With these updates, there are now three PPP Loan Forgiveness Applications: 3508S, 3508EZ, and 3508.
The SBA recently unveiled the PPP loan forgiveness platform. Beginning August 10, the SBA will accept forgiveness applications barring further rule changes and/or delays.
We know you are likely eager to continue down the path toward loan forgiveness, and we are vigorously preparing for our role in that process. As ready as we all are, there is still pending legislation in Congress that has the potential to reduce the forgiveness requirements for smaller dollar loans.
As such, we ask for continued patience until we have more information. We will let you know when that time comes. But if you are unwavering in your desire to apply for forgiveness as soon as possible, we will be ready to help you very soon.
Please contact your lender if you have any questions or concerns.
We appreciate your continued trust in us as we work through the Paycheck Protection Program (PPP) loan process.
Like us, you may be anxiously awaiting more details about loan forgiveness. We continue to wait for the SBA to provide an update for when and how to submit the forgiveness application. The extension until August 8 of the deadline to apply for PPP loans, which you have probably seen in the news, may be connected to this delay in the release of the forgiveness information.
We recognize that this delay may raise questions about PPP loan payments. With the passing of the PPP Flexibility Act in June, the rules were amended to extend the deferral period. Please review the Borrower Notice – PPPFA Changes to Deferral Period for a summary of those changes and rest assured that you will not be asked to make a payment on your loan until you have been given ample time to request forgiveness in accordance with the current PPP guidance.
On June 16, the SBA released updated PPP forgiveness applications and related instructions which are linked below. Many PPP borrowers will be eligible to use the shorter 3508EZ form.
Borrowers who are self-employed, independent contractors, or sole proprietors who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form (SBA Form 2483) should be eligible to apply for forgiveness with the EZ form.
Additionally, certain borrowers who did not reduce annual salary or hourly wages of any employee by more than 25% during the Covered Period or the Alternative Covered Period AND did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period (the instructions include provisions for certain safe harbors) may be eligible to apply for forgiveness with the EZ form.
Borrowers who do not meet the eligibility requirements for the EZ form will apply for forgiveness using the standard 3508 form.