On Thursday October 6th, 2020, the SBA along with the U.S. Treasury Department issued a new, streamlined loan forgiveness application for businesses with Paycheck Protection Program loans of $50,000 or less. The measure, as outlined in an accompanying final interim rule, further simplifies the loan forgiveness process, following the SBA’s release of a more borrower-friendly “EZ” loan form in June. Businesses have been able to apply for forgiveness since August 10.
The new form (Form 3508S) does not require borrowers with loans of $50,000 or less to reduce their loan forgiveness calculations if they’ve cut head count or salaries. Also, the form requires fewer calculations and less documentation for eligible borrowers.
While the new application is available to borrowers with loans of $50,000 or less, not all borrowers will be able to benefit.
For one, the application is not retroactive so if you’ve already applied for PPP loan forgiveness, this new guidance does not apply. If your company is part of a larger organization, you may not be allowed to use the application even if your loan is under $50,000 as the application is available only to borrowers who together with affiliates received loans totaling less than $2 million. Check out the SBA website for more information.