On October 8th, 2020, the SBA (Small Business Administration) released an even more simplified version of the PPP (Paycheck Protection Program) forgiveness application.
Who Does This Apply Too?
This application only applies to borrowers that received a PPP loan of $50,000 or less. The exception to that is this new form cannot be used if the PPP loan amount totaled $2 million or more between any affiliate companies. The difference between the 3508S and 3508EZ is the 3508S has only one line for the forgiveness amount. Users of the 3508S will not need to list out each separate category of expenses.
Here's What’s New
The new application relieves the borrower of any penalties related to:
- FTE (Full Time Equivalent) Reduction (reduction in employees)
- Salary/Hourly wage reductions (reduction in salary or hourly pay to employees)
Here’s What Still Applies
Here are the most notable of previous requirements that still apply:
- Borrower’s liabilities regarding certifications and representations
- Spend at least 60% on payroll
- Supporting documentation required by lenders
- Owner’s compensation remains limited to 2.5 months of 2019 compensation or the $100k limitation of $15,385 or $20,833 for an 8-or-24-week covered period, respectively.
- Retain your documentation for at least 6 years after the forgiveness is approved
Some recipients of PPP Loans might find that using the previous 3508EZ form is still easier due to the separation of payroll and non-payroll expenses correlating with the actual forgiveness calculation.
If you have any additional questions regarding the new form or your PPP applications, ADKF continues to provide the services of our PPP loan team! PPPLoanTeam@adkf.com
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