Thereâ€™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 wonâ€™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.
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