The U.S. Small Business Administration (SBA) has released a new, simpler loan forgiveness application for the Paycheck Protection Program (PPP) loans of $50,000 or less. The new form streamlines the PPP forgiveness process by providing financial and administrative relief to America's smaller businesses.
"The new form introduced today demonstrates our relentless commitment to using every tool in our toolbelt to help small businesses and the banks that have participated in this program,” said Administrator Jovita Carranza. “We are continuing to ensure that small businesses are supported as they recover.”
The new form (3508S) is one page long and excludes the payroll calculations necessary for the 3508 and 3508EZ Forms. This means that forgiveness of loans of $50,000 or less are no longer based on the 60% payroll expense requirement. The hope is to help small businesses with owner/employees or businesses with minimal staff.
Loans for over $50,000 will need to either complete the 3508 or 3508EZ forms, depending upon the percentages used for eligible payroll expenses and whether or not Safe Harbor rules apply.
Business owners should check with their banks for help with which form is best for your company.
The SBA started accepting loan forgiveness forms on August 10, 2020. Borrowers have 10 months from the end of the loan forgiveness covered period to apply for forgiveness and deferral period ends and payments must begin.
To learn more, visit the SBA Resource File here.
Although the PPP Loans are no longer being issued, there are other options available.