Simplified PPP Forgiveness Application for Loans of $50,000 or LessOctober 13, 2020
Small businesses, did you take out a PPP loan in the amount of $50,000 or less? The SBA and Treasury have simplified the loan forgiveness process for you. Let’s dive in.
Did you take out a PPP loan in the amount of $50,000 or less? You’re in luck. The U.S. Small Business Administration (SBA) in consultation with the Treasury Department, released a simpler loan forgiveness application for PPP loans of $50,000 or less, easing the burden on small businesses. Here’s what you should know.
Some helpful background
Earlier this year, the emergency loan program was established to help business owners through the COVID-19 pandemic. Since then, PPP has provided loans totaling $525 billion to millions of businesses.
One of the main attractions to PPP loans is the potential to have the loan partially or fully forgiven if the proceeds are used for qualifying expenses. As we covered in our blog, The SBA has released the PPP Loan Forgiveness Application, the SBA released the PPP application on May 15, 2020. Many PPP borrowers are through or nearing the end of their covered period, which means it’s time to apply for forgiveness. Many businesses have run into complications with their loan forgiveness applications.
Recent forgiveness process changes
In order to streamline the forgiveness process for borrowers with loans of $50,000 or less, the SBA and Treasury released a simpler loan forgiveness application. This will also help lenders to process forgiveness applications as quickly as they can. The change is also expected to protect against fraud and misuse of funds.
Inside the simplified form (SBA Form 3508S):
- Several of the issues that make the standard application time consuming and confusing have been removed.
- A borrower of a loan less than $50,000 is no longer required to reduce the amount eligible for forgiveness based on:
-Reductions in full-time equivalent (FTE) employees
-Reductions in employee salary or wages
- The simplified form cannot be used by borrowers who received loans, together with their affiliates, totaling $2 million or more.
Questions on the new form? Need assistance with your loan forgiveness application? Contact us.