On October 8th, the Treasury and U.S. Small Business Administration (SBA) released a new, scaled-down forgiveness application for borrowers with a PPP loan of $50,000 or less, other than any borrower that together with its affiliates received loans totaling $2 million or greater. The new interim final rule (linked here) pertaining to this streamlined process also provides new guidance for both forgiveness and loan review processes for PPP loans.
This new, simplified application (Form 3508S) has been much anticipated by both borrowers and lenders. Although the PPP loans which will qualify for this application account for only 9% of PPP dollars loaned, those loans total about two-thirds of all PPP loans issued.
With the new rules in place, PPP borrowers of $50,000 or less are now exempt from any decrease in forgiveness of the loan based on a reduction in full-time equivalent (FTE) employees and/or reductions in employee salary or wages. This eliminates the need for borrowers of $50,000 or less to calculate potentially complex FTE or salary reduction totals. While borrowers will still be required to make certifications and provide some documentation for their lender for payroll and nonpayroll costs, the process for both borrowers and lenders is now much simpler.
If you have questions regarding your PPP loan forgiveness application, please contact our team. We are always here to help.