The Small Business Administration (SBA) has recently issued guidance related to PPP loan forgiveness for loans of $50,000 or less.
New Alternate PPP Loan Forgiveness Application
- A borrower of a PPP loan of $50,000 or less may use a new SBA Form 3508S to apply for loan forgiveness.
- A borrower that uses the new Form 3508S is exempt from any reductions in the forgiveness amount based on reductions in full-time equivalents (FTE), or reductions in employee pay rates.
- The guidance does NOT provide automatic forgiveness of loans $50,000 or less.
- Similar to the Forms 3508 and 3508EZ, the new, simplified application requires certain administrative information, certifications on behalf of the borrower, and a signature of an authorized representative.
- The second page has optional demographic information that can be filled out voluntarily.
- The forgiveness amounts related to payroll and other eligible expenses must be calculated, and a total forgiveness amount is required on the new form.
- While schedules and exhibits on the detailed calculations are not included, certain supporting documentation is required to be submitted with the application.
- All information and calculations related to the new Form 3508S must be maintained for six years after the PPP loan is forgiven or otherwise satisfied.
For more information on how this new PPP loan guidance may affect your business during a transition of ownership, please contact your CRI advisor.