Did your organization receive a Paycheck Protection Program (PPP) loan of $50,000 or less, and are you concerned about the potential complexity of the process of applying for loan forgiveness? Good news. Recipients of PPP loans of $50,000 or less will be able to apply for forgiveness using a simplified application that the Treasury and U.S. Small Business Administration released October 9th. A new interim final rule (IFR) provides guidance concerning forgiveness and the loan review processes for PPP loans of $50,000 or less. For these types of loans, 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.
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) can use the simplified application form, known as Form 3508S. Please refer to the instructions for the application form. On this application, borrowers will not be required to perform potentially complicated FTE or salary reduction calculations. However, borrowers will have to make some certifications and provide documentation to the lender for payroll and nonpayroll costs.
The borrower is responsible for providing an accurate calculation of the loan forgiveness amount. The borrower will attest to the accuracy of the reported information and calculations on the loan forgiveness application. Note that the amount of loan forgiveness that a borrower may receive cannot exceed the principal amount of the PPP loan. Please contact us if you have any questions regarding your PPP loan forgiveness application.