On October 8, 2020 the Small Business Administration (SBA) and the Treasury Department issued a simplified Payroll Protection Program (PPP) forgiveness application (Form 3508S) and instructions for loans of $50,000 or less, as well as an Interim Final Rule (IFR) which explains the changes.
Forgiveness Reduction Waived for Loans less than $50,000
In accordance with the Interim Final Rule (IFR) qualifying PPP borrowers will not need to document compliance with the targeted FTE and wage level maintenance requirements.
Loan forgiveness amounts will not be reduced, even if FTE or wage levels decreased during or after the covered period, as long as the loan was $50,000 or less, and the borrower, when combined with any affiliates, collectively received less than $2 million.
Many borrowers who received PPP loans have already completed their specified “covered period” and spent the PPP loan proceeds on eligible expenses. In that case, you may be ready to submit the related forgiveness applications (SBA Form 3508, 3508EZ or 3508S) however it is not urgent that forgiveness applications be submitted right now. In fact if you have a PPP loan under $150,000, we recommend waiting to apply for forgiveness as there could be additional relief. As a reminder, you have until ten months after the expiration of your covered period to file your forgiveness application. For most of you, that will allow you to wait till the middle of 2021.
If you have any questions about your PPP Loan please don’t hesitate to contact us.