As of Oct. 8, 2020, the Department of Treasury reports that the Small Business Administration (SBA) has begun processing Paycheck Protection Program (PPP) loan forgiveness applications and remitting loan forgiveness payments to lenders. Concurrently with this announcement, a new Interim Final Rule (#25) was released along with a new streamlined and much simpler PPP loan forgiveness application, SBA Form 3508S. SBA Form 3508S may be used by PPP borrowers applying for loan forgiveness on PPP loans with a total loan amount of $50,000 or less, except for PPP borrowers that together with its affiliates received loans totaling $2 million or more.
A PPP borrower that uses SBA Form 3508S is exempt from any reductions in the borrower’s loan forgiveness amount based upon a reduction in full-time equivalents or reductions to an employee’s salary of 25 percent or more. Furthermore, when a PPP borrower submits a SBA Form 3508S to its lender, it must provide:
- All of the PPP borrower certifications contained within SBA Form 3508S,
- Its lender with documentation to aid in lender’s verification of the PPP borrower’s payroll and non-payroll costs,
- An accurate calculation of its loan forgiveness amount, and
- An attestation to the accuracy of its reported information and calculations on the SBA Form 3508S loan forgiveness application.
A PPP borrower will not receive forgiveness without submitting all required documentation to its lender and lenders may rely on PPP borrower representations. Pursuant to SBA guidance, PPP lenders do not need to independently verify a PPP borrower’s reported information if the PPP borrower submits documentation supporting its request for loan forgiveness and attests that it accurately verified the payments for PPP eligible payroll and non-payroll costs.
For further information, please contact any member of Taft’s SBA Task Force.
Please visit our COVID-19 Toolkit for all of Taft’s updates on the coronavirus.