Forgiveness Simplified for Paycheck Protection Program Loans of $50K or Less
As U.S. taxpayers anxiously await potential movement on a new stimulus package, the Small Business Administration (SBA) and Treasury Department released a simpler loan forgiveness application for Paycheck Protection Program (PPP) loans of $50,000 or less. This effort aims to streamline the PPP forgiveness process for borrowers as well as lenders.
Borrowers with PPP loans of $50,000 or less can self-certify they used the money appropriately and receive complete forgiveness but will still be required to provide documentation to the lender for payroll and nonpayroll costs. These borrowers can use the new SBA Form 3508S for their application or wait for their lender to update their online application portals.
Under this new rule, borrowers of $50,000 are exempted from any reduction in forgiveness or penalty based on reductions in full-time equivalent employees or reduction in salary and wages. (Previous regulations outlined that if an employer reduced salaries by over 25%, the amount over 25% would not be forgivable.) These borrowers would also have to document that if they did furlough employees, they tried in good faith to rehire them or couldn’t hire similarly qualified individuals, or also be subject to an unforgiven portion of their PPP funds.
There’s still a possibility for additional clarification from SBA. If you would like to discuss your PPP forgiveness plan or whether you should apply now or wait, please contact your BMF Advisor.
Check out all our Paycheck Protection Program articles and visit our COVID-19 Resource Center for information and additional resources for you and your business.
James E. Merklin?>
CPA/CFF, CFE, CGMA, MAcc
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