On October 8, 2020, the SBA released a PPP Loan forgiveness application (SBA Form 3508S) and instructions for applicants who received a PPP Loan of $50,000 or less.
The initial PPP Loan forgiveness application form was issued on May 15, 2020 and revised on June 17, 2020. The original and revised applications are discussed here and here, respectively.
Also, on June 17, 2020, the SBA released a new PPP Loan forgiveness application form which was meant to be an easier and more borrower friendly application. The “EZ” application form is addressed here.
Critics have voiced their concerns throughout most of the PPP Loan forgiveness process that the previous loan forgiveness applications were too time-consuming and burdensome.
SBA Form 3508S is two pages long and may be used if the borrower: (1) received a PPP Loan of $50,000 or less; and (2) together with its affiliates, if any, received PPP Loans totaling less than $2 million.
SBA Form 3508S is expected to impact roughly 3.6 million borrowers, which represents more than two-thirds of the PPP Loans approved by the SBA.
According to the interim final rule issued with the application, borrowers who use SBA Form 3508S are exempt from any otherwise applicable reductions in the borrower’s loan forgiveness amount based employee reductions or salary and wage reductions (i.e. a borrower’s total loan forgiveness will not be reduced if the borrower had a reduction in full-time employees or a reduction in salaries and wages).
The SBA continues to modify the PPP Loan forgiveness process. Each borrower’s circumstances are different and should be handled on a case-by-case basis.
FOS continues to monitor the PPP Loan forgiveness process and related SBA releases. If you have any questions regarding SBA Form 3508S or the PPP Loan forgiveness process, please contact your FOS attorney.
Be well.
