Last week, the SBA released revised forms and new guidance for borrowers who seek to apply for PPP loan forgiveness.
The updated forms include SBA Form 3508S, the one-page form for PPP borrowers who received $150,000 or less loans. This applies to both first- and second-time borrowers.
Here are some important highlights of the form:
- Form 3508s seeks you to fill in the loan amount, disbursement date, employee number, covered period dates, amount of the loan used on payroll, and the forgiveness amount you are seeking.
- It needs fewer calculations and less documentation for borrowers. The SBA does not require you to show your forgiveness amount calculations, however, they may still request papeworks and information as part of their review process.
- For first round PPP loans approved on or before August 8 2020, if the applicant is directed to submit SBA Form 3508D, that document must be sent to the lender within 30 days after loan forgiveness application.
- For second round PPP loans, applicants who did not submit gross receipts reduction certification on the Borrower’s loan application, they must send the supporting documentation simultaneously.
Three other forms released by the SBA and treasury are: Form 3508, Form 3508EZ, and Form 3508D.
Form 3508-EZ is a simplified application form for applicants who meet specific safe harbor conditions. These include:
- Employers who did not decrease compensation of any employee by 25% or more, and did not reduce employee number or average paid hours.
- Employers who did not decrease compensation of any employee by 25% or more, and whose business operation capacity was reduced due to COVID-related restrictions.
Form 3508 is the general forgiveness form to be used by applicants who do not qualify for either of the previous forms. There are minor changes made in the form including the addition of four new categories of eligible costs.
Both Form 3508 and Form 3508EZ, requires applicants to submit payroll and nonpayroll documentation as described in the instructions.
Form 3508D on the other hand, is a disclosure document that some applicants must use to disclose controlling interests in the business by other entities including government officials.
With the new forms and guidance, The SBA and the Treasury aims to simplify the forgiveness process, incentivize more lending from community banks and prioritize funding to minority-owned businesses.
The new PPP started accepting applications on January 11, opening first to community financial institutions, then opening to all lenders on January 19. As announced by the SBA about 60,000 loan applications were approved in the first week of PPP relaunch.
Levine and Associates continues to help business owners who seek to apply for PPP loans and loan forgiveness. If you are interested to know your options in the program or wish to
know what current programs you are qualified for, book a non commitment free-consultation with us at https://calendly.com/levine-and-associates.