Simplified PPP Loan Forgiveness for Loans of $50,000 or Less

  |   October 13, 2020

There’s good news for the many business owners who have Paycheck Protection Program (PPP) loans of $50,000 or less. Treasury and the U.S. Small Business Administration (SBA) have just released a simplified application for PPP forgiveness of loans under $50,000.

The new application form, SBA Form 3508S, can be used to apply for forgiveness on these PPP loans unless the borrowers, together with their affiliates, received loans totaling $2 million or more.

A new interim final rule (IFR) provides guidance concerning forgiveness and loan review processes for PPP loans of $50,000 or less. Under the IFR, borrowers are exempt from any forgiveness reductions based on two criteria: (1) reductions in full-time equivalent (FTE) employees and (2) reductions in employee salary or wages.

The IFR makes things easier for PPP borrowers of $50,000 or less because they potentially won’t be required to perform FTE or salary reduction calculations. However, the borrowers will still be required to make some certifications and provide documentation to the lender for payroll and non-payroll costs.

According to the IFR, of the 5.2 million PPP loans approved by the SBA, about 3.57 million were for $50,000 or less. These loans represent about $62 billion in PPP loans, and about 1.71 million made to businesses that reported having either no employees or just one.

REDW is here to help you navigate PPP, especially forgiveness issues. Please contact REDW Principals James Ortiz or Christina Roderick to discuss any concerns about PPP-related issues.


REDW is committed to keeping you informed at all times, and especially through the ramifications of the COVID-19 pandemic. Stay connected with us on LinkedIn and @REDWLLC on Twitter. Access some of our other updates on our COVID-19 Resource Hub.

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