Treasury and the SBA have issued an interim final rule that provides simplified loan forgiveness application (new Form 3508S) and loan review processes for Paycheck Protection Program (PPP) loans of $50,000 or less. A borrower that uses new Form 3508S will be 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 that would otherwise apply.
Lenders receiving Form 3508S from a borrower must confirm receipt of the borrower certifications and documentation. Providing an accurate calculation of the loan forgiveness amount is the responsibility of the borrower. The lender does not need to independently verify the borrower’s reported information if the borrower submits documentation supporting its request for loan forgiveness and attests that it accurately verified the payments for eligible costs.
The interim final rule also provides guidance on lender responsibilities when a borrower of any size PPP loan submits documentation of eligible costs for forgiveness in excess of a borrower’s PPP loan amount. In such cases, the lender should confirm receipt of the documentation and, if applicable, “confirm the borrower’s calculations on the Loan Forgiveness Application, up to the amount required to reach the requested Forgiveness Amount.”
SBA notes that it began approving PPP loan forgiveness applications and began remitting forgiveness payments to PPP lenders on October 2, 2020.
Click here for the new simplified loan forgiveness application, Form 3508S
Click here for the instructions to Form 3508S.
Click here to read the interim final rule.