SBA Releases Loan Forgiveness Application for PPP Loans $50k or Less|
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On October 8, 2020, the U.S. Small Business Administration (SBA) released the Interim Final Rule on Additional Revisions to Loan Forgiveness and Loan Review Procedures Interim Final Rules (October 8 IFR). You can read Aprio’s summary of the October 8 IFR here. Concurrently, the SBA issued an alternative loan forgiveness application, SBA Form 3508S.
Who can use Form 3508S
Form 3508S is for PPP borrowers applying for loan forgiveness on PPP loans with a total loan amount of $50,000 or less, except for those borrowers that together with their affiliates received loans totaling $2 million or greater. There are approximately 3.57 million outstanding PPP loans of $50,000 or less, totaling approximately $62 billion of the $525 billion in PPP loans.
What you need to know about Form 3508S
The most notable difference on Form 3508S as compared to its counterparts, Form 3508 or Form 3508EZ, is that there are no calculations. Alternatively, a borrower of a PPP loan who qualifies and uses Form 3508S (or lender’s equivalent form) to apply for loan forgiveness will be required to make seven certifications pertaining to their compliance with the rules and regulations.
The lack of required calculations is appealing to qualified applicants utilizing Form 3508S, however, there are still documentation requirements associated with the application to substantiate that eligible payroll and non-payroll costs were paid or incurred in the amount equal to or greater than the amount of forgiveness being requested.
Let Aprio help
Aprio has established a dedicated PPP loan forgiveness team that is continuously monitoring new guidance from the SBA, as well as the Treasury, Congress and the IRS, to ensure we have the latest information when advising our clients.
If you would like to discuss how to interpret these new requirements, accurately complete your forgiveness application and maximize PPP loan forgiveness contact Aprio’s dedicated PPP loan forgiveness team for a consultation.
Disclaimer for services provided relative to SBA programs and the CARES Act
Aprio’s goal is to provide the most up to date information, along with our insights and current understanding of these programs and regulations to help you navigate your business response to COVID-19.
The rules regarding SBA programs are constantly being refined and clarified by the SBA and other agencies In certain instances, the guidance being provided by the agencies and/or the financial institutions is in direct conflict with other competing guidance, regulations and/or existing laws.
Due to the evolving nature of the situation and the lack of final published rules, Aprio cannot guarantee that additional changes or updates won’t be needed or forthcoming and the original advice given by Aprio may be affected by the evolving nature of the situation.
You need to evaluate and draw your own conclusions and determine your Company’s best approach relative to participation within these programs based on your Company’s specific circumstances, cash flow forecast and business strategy.
In situations where resources are provided by third parties, those services should be covered under a separate agreement directly with that service provider. Aprio is not responsible for the actions of any other third party.
Aprio encourages you to contact your legal counsel to address the legal implications of the impact of the CARES Act and specifically your participation in any of the SBA programs.