On October 8, 2020, the U.S. Small Business Administration (SBA) released Form 3508S in an effort to simplify and streamline the PPP loan forgiveness process on loans of $50,000 or less. The new form was released in conjunction with an updated Interim Final Rule (IFR) issued by the SBA and U.S. Department of Treasury, which provides as follows:
A borrower of a PPP loan of $50,000 or less, other than any borrower that together with its affiliates received loans totaling $2 million or greater, may use SBA Form 3508S (or a lender’s equivalent form) to apply for loan forgiveness. A borrower that uses SBA Form 3508S (or lender’s equivalent form) is exempt from any reductions in the borrower’s loan forgiveness amount based on reductions in full-time equivalent (FTE) employees or reductions in employee salary or wages that would otherwise apply. [Emphasis Added.]
Form 3508S is a streamlined one-page application, which requires the borrower to make some certifications and representations, including that the loan funds were used for costs eligible for forgiveness. The exemption provided in this latest IFR helps to simply the process by eliminating the need for calculations to account for employee or salary/wage reductions.
When submitting the application, borrowers must provide documentation to the lender for eligible payroll and nonpayroll costs. A detailed list of the documents each borrower is required to submit is provided in the Instructions for Form 3508S.
We will keep you informed of any additional information as it becomes available.