The process of applying for Paycheck Protection Program loan forgiveness has become simpler for many borrowers.
Employers that received PPP loans of $50,000 or less can now use a simplified application – Form 3508S — released Thursday by the U.S. Small Business Administration (SBA) and Treasury Department.
Under the new interim final rule issued, borrowers of $50,000 or less are not subject to a reduction in forgiveness based on:
- reductions in full-time-equivalent employees
- reductions in employee salary or wages
The new application is available for borrowers of $50,000 or less unless the borrower and its affiliates together received loans of $2 million or more. The SBA estimates that about 3.5 million of its 5.2 million PPP loans were for $50,000 or less.
Regardless of the amount, borrowers are still required to provide certifications and documentation to the lender to confirm payroll and nonpayroll costs. Instructions for using Form 3508S were included as part of the latest announcement.
The new IFR also clarifies the responsibilities of PPP loan lenders. When a borrower submits the new Form 3508S or an equivalent form provided by the lender, that lender must:
- confirm receipt of the borrower’s certifications included with the form
- confirm receipt of payroll and nonpayroll cost documentation
The borrower is required to provide an accurate loan forgiveness amount and must attest to the accuracy of that information. Lenders are instructed to rely on those representations.
If you have questions about how these latest PPP changes might affect your loan or forgiveness process, reach out to a tax advisor at KraftCPAs.