New PPP Loan Forgiveness Application for Loans $50,000 or Less
On October 8, 2020, the U.S. Small Business Administration (SBA), in consultation with the Department of the Treasury, released a simplified loan forgiveness application for Paycheck Protection Program (PPP) loans of $50,000 or less. This simpler application eases the forgiveness process for America’s smallest businesses.
The Journal of Accountancy shared a recent news update summarizing the change referenced below.
PPP borrowers of $50,000 or less are exempted from any reductions in forgiveness based on:
- Reductions in full-time-equivalent (FTE) employees; and
- 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. These loans accounted for about $62 billion of the $525 billion in PPP loans. About 1.71 million PPP loans of $50,000 or less were made to businesses that reported having zero employees or one employee.
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.
Attached are links to the new simpler loan forgiveness application and the instructions for completing the application.
Ahola will assist clients by providing the documentation to support the forgiveness application, such as reports showing the loan period payroll costs and copies of required tax returns.
If you would like to request PPP loan forgiveness documentation or if you have questions and concerns regarding PPP Loan Forgiveness, please contact COVIDSupport@ahola.com.