The U.S. Small Business Administration (SBA) released a one-page form to simplify applying for forgiveness of Paycheck Protection Program (PPP) loans. They also released newly revised and updated forms to meet the requirements of the most recent stimulus-related legislation.
The COVID-19 relief package passed last month saw the return of the PPP lifeline. The package included $284 billion in forgivable loans to help small businesses survive the pandemic’s economic fallout. It also included a requirement for the SBA to issue streamlined forms within 24 days of the legislation being signed into law.
This was meant to simplify the process of applying for forgiveness. It also came with conditions designed to bring forth more loans from community banks, especially for minority-owned businesses that had difficulty obtaining loans last year.
The revised forms include:
- Form 3508S: A one-page forgiveness form for PPP loans of up to $150,000 along with instructions.
- Form 3508-EZ: A simpler application form for forgiveness for borrowers who meet specific safe harbor conditions.
- Form 3508: The complete application for the forgiveness of PPP loan for those who don’t qualify for using either of the forms above.
- Form 3508D, where borrowers could disclose controlling interests in the business by other companies and whether any government officials are involved in the business.
The one-page Form 3508S forgiveness application is beneficial for small businesses who have borrowed less than $150,000 from the PPP.
Form 3508S reduces the amount of information and documentation provided to the lender when the borrower applies for loan forgiveness. The borrower must accurately calculate the requested loan forgiveness amount and verify the payments for the eligible costs included in it.
The borrower must also retain all employment records/payroll documentation for four years.
All other documentation must be retained for three years after the date of the loan forgiveness application is submitted to the lender, and permit authorized representatives of the SBA — including representatives of its Office of Inspector General — to access such files upon request.