October 9, 2020
Yesterday, the SBA released a new simple one-page loan forgiveness application (Form 3508S) for PPP borrowers with loans of $50,000 or less. These borrowers are also exempted from the requirement to reduce their loan forgiveness due to reductions in employees and salaries.
In addition to the basic borrower and loan information, the form requires the borrower to make the following representations and certifications:
- The loan proceeds were used to pay eligible forgiveness costs;
- Payroll costs were at least 60% of the forgiveness amount;
- Owner compensation is capped at $20,833 for the 24-week covered period ($15,385 if 8-week period is used);
- Funds were not knowingly used for unauthorized purposes;
- Payments for eligible costs have been verified and calculated by the borrower; and
- Required documentation has been submitted to the lender.
The SBA also released new rules yesterday that exempt borrowers of $50,000 or less from forgiveness reductions based on:
- Reductions in full-time equivalent employees
- Reductions in employee salary or wages
According to the SBA, there are approximately 3.57 million outstanding loans of $50,000 or less.
You can always count on us to be your trusted advisors and keep you updated as more information regarding the PPP loans is released. If you have any questions, please do not hesitate to call your accountant or email us at email@example.com.