COVID-19 Update: SBA Released Streamlined Application for Some PPP Borrowers

Posted By: Jon Patterson, CPA, CVA

 

On October 8,2020, following requests by many businesses and lenders across the country, the Small Business Administration released a streamlined application for Paycheck Protection Program (PPP) borrowers who borrowed $50,000 or less (affiliate groups are excluded). The application, Form 3508S. Although Form 3508S is a shorter form, it is not an automatic approval for borrowers.

 

 

Form 3508S Highlights
  • A PPP loan borrower who received $50,000 or less is not required to reduce the forgiveness amount for salary reductions and changes in FTE’s due to de minims exemptions added by the SBA and Treasury.
  • The application does not require the borrower to show their calculations related to forgiveness but it still must be done and documented should it be requested.
  • The new form does require the certifications by the borrower, most notably:
    • The dollar amount for which forgiveness is requested does not exceed the principal amount of the PPP loan and:
      • was used to pay costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest payments; business rent or lease payments; or business utility payments);
      • includes payroll costs equal to at least 60% of the forgiveness amount;
      • if a 24-week Covered Period applies, does not exceed 2.5 months’ worth of 2019 compensation for any owner employee or self-employed individual/general partner, capped at $20,833 per individual; and
      • if the Borrower has elected an 8-week Covered Period, does not exceed 8 weeks’ worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $15,385 per individual.
    • Documentation of the payroll costs and other qualified expenses for the PPP loan still need to be submitted to the Lender.
  • Resources

 

BLS will continue to send important updates as information becomes available. Please be sure to visit our COVID-19 Resource Center for past guidance updates and additional details. Reach out to your BLS Team Member or email us at info@belfint.com with any questions.

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