On October 6, 2020, the Small Business Administration issued new guidance for Paycheck Protection Program (PPP) loan forgiveness on loans with a total amount of $50,000 or less, except for those borrowers that together with their affiliates received loans totaling $2 million or greater.
A borrower of a PPP loan of $50,000 or less (except as noted above) is now exempt from any reductions in the borrower’s loan forgiveness amount based on reductions in full-time equivalent (FTE) employees or reductions in employee salary or wages which would otherwise apply.
The SBA issued an alternative Loan Forgiveness Application, SBA Form 3508S, for use by PPP borrowers applying for loan forgiveness on PPP loans with a total loan amount of $50,000 or less. Borrowers must still submit to their lenders supporting documentation showing the payroll costs incurred or paid during the Covered Period or Alternate payroll Covered Period and eligible nonpayroll costs covered by this program. For more information on these guidelines, click here.
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. Approximately 1.71 million PPP loans of $50,000 or less were made to businesses that reported having zero employees (presumably not counting the owner as an employee) or one employee.
Click here to view the simpler loan forgiveness application, Form 3508S.
Click here to view the instructions for completing the Form 3508S.
Click here to view the Interim Final Rule on the simpler forgiveness process for loans of $50,000 or less.
*This document simplifies complex Acts as it is understood by Time Equipment Company. It is not to be taken as legal advice. The regulations for this program are changing. For further information about the Paycheck Protection Program please visit www.sba.gov or www.coronavirus.gov