SBA and Treasury Announce Simpler PPP Forgiveness for Loans of $50,000 or Less
Last week the U.S. Small Business Administration (SBA) and Treasury announced recipients of Paycheck Protection Program (PPP) loans of $50,000 or less will be able to apply for forgiveness using a simplified application. This action streamlines the PPP forgiveness process to provide financial and administrative relief to America’s smallest businesses.
Under the new interim final rule (IFR), PPP borrowers of $50,000 or less are exempted from any reductions in forgiveness based on:
- Reductions in full-time-equivalent (FTE) employees
- Reductions in employee salary or wages.
The new application form, SBA Form 3508S, can be used by PPP borrowers applying for forgiveness on PPP loans with a total loan amount of $50,000 or less, unless those borrowers together with their affiliates received loans totaling $2 million or more.
Of the 5.2 million PPP loans approved by the SBA, about 3.57 million were for $50,000 or less, according to the IFR.
The IFR streamlines the forgiveness process for PPP borrowers of $50,000 or less because they will not be required to perform potentially complicated FTE or salary reduction calculations. Borrowers of $50,000 or less still will have to make some certifications and provide documentation to the lender for payroll and nonpayroll costs.
Contact us for questions and assistance with your PPP loan forgiveness application.