New PPP Loan Forgiveness Application
The US Small Business Administration (SBA) and Treasury updated their loan forgiveness forms on January 19, 2021. Among these is the PPP Loan Forgiveness Application Form 3508S, for those whose PPP loan was $150,000 or less. Form 3508S requires info on the borrower’s loan amount, disbursement date, employee totals, covered period dates, how much was spent on payroll, and the amount of loan forgiveness being requested. Borrowers do not need to provide supporting documents with the application, but they must retain all support and calculations in case the lender or SBA asks for the support.
The SBA also revised Form 3508 and Form 3508EZ. These forms have a list of the required documentation included in the instructions. Furthermore, another new form, Form 3508D, will be required for certain individuals to disclose a controlling interest in any entity applying for a PPP loan.
New Interim Final Rule (IFR)
Alongside these new forms, the SBA and Treasury released an interim final rule (IFR) which simplified previous loan forgiveness rules and included changes made by the Economic Aid to Hard-Hit Small Business, Nonprofits, and Venues Act. Also known as P.L. 116-260, this act gave an additional $284 billion of funding to the PPP and added second-draw loans. This new round of PPP loans let borrowers apply for a second loan, given they meet the second draw requirements.
PPP Second-Draw Info
All of these new forms and the new interim final rule apply to all first-draw or second-draw PPP loans. The PPP was reopened on January 11th for community financial institutions loaning to underserved businesses, opened to lenders with $1 billion or less on January 14th, and for all other lenders on January 19th.
So far, the SBA has stated they have already approved nearly 60,000 applications from thousands of lenders for more than $5 billion since the relaunch of the PPP Loan program. If you have questions about PPP loans or any other COVID-related topics, please contact your HW&Co. advisor.
