October 12, 2020

SBA Issues New PPP Forgiveness Application for Loans under $50,000

On October 8, the Small Business Administration announced a simplified Payroll Protection Program (PPP) forgiveness application for most loans of $50,000 or less. SBA also eased the burden on PPP lenders, allowing lenders to process forgiveness applications more swiftly.

Click here to view the simpler loan forgiveness application (Form 3508S).

Click here to view the instructions for completing the simpler loan forgiveness application.

Click here to view the Interim Final Rule on the simpler forgiveness process for loans of $50,000 or less.

Here is a brief summary of the provisions of this new rule:

· Small business borrowers who had loans of less than $50,000 may use the new application and will benefit from the more relaxed rules associated with the application. However, if the loan was part of a group of affiliated business that in aggregate received more than $2,000,000 in PPP loans, the borrower may not use the new application.

· Those who qualify to use the new application will be exempted from any forgiveness reduction due to reduction in FTE counts or employee wages.

· The primary qualifier for forgiveness will be that the loan proceeds were used exclusively to pay qualifying costs. The definition of these costs remains unchanged. While these costs do not have to be detailed on the application itself, the borrower must still provide documentation of these costs as outlined in the instructions for the application.

Employer Advantage has a reporting package designed specifically for the forgiveness application process. While some parts of that package will not be needed for the new Form 3508S application, most of it still applies and will be needed for documentation. If you have not yet requested your forgiveness report package, you can submit that request by clicking here.

Many borrowers have wisely waited in filing for loan forgiveness, hoping for additional relief. Borrowers that are qualified to use Form 3508S should consider starting the process for loan forgiveness now. Borrowers under the $50,000 threshold are unlikely to see additional program changes.

If you have additional questions or concerns about the application process, please feel free to reach out to us at Additionally, we strongly recommend consultation with your lender as questions arise, as they will be the primary arbiter of loan amounts qualifying for forgiveness.


The Employer Advantage Team