Streamlined PPP Loan Forgiveness Application
The SBA has approved a simplified one-page PPP loan forgiveness application for loans of $50,000 or less. The new streamlined form makes the application process much easier for borrowers who obtained less than $50,000. The new form 3508S does not require calculations or reporting of employee hours and salaries. Rather, borrowers can self-certify their loan forgiveness amount. Additionally, eligible borrowers who complete form 3508S are exempt from any decrease in the forgiveness amount based on reductions in full-time employees or employee salary/wages.
While including the calculations on form 3508S is not required, borrowers will still need to compute the amount eligible for forgiveness. Documentation verifying payroll and non-payroll costs is required and the SBA may, at their discretion, request to see the additional calculations. View Form 3508S
Clarifies PPP Deferral Period
The SBA has updated their FAQs with Question 52 regarding the deferral period. The PPP Flexibility Act that went into effect on June 5, 2020 extended the deferral period for borrower payments of principal, interest, and fees on all PPP loans to the date that SBA remits the borrower's loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower's loan forgiveness covered period). Previously, the deferral period could end after 6 months. This raises the question of whether lenders and borrowers are required to modify promissory notes used for PPP loans to reflect the extended deferral period.
The SBA has clarified that
extension of the deferral period under the Flexibility Act automatically
applies to all PPP loans. Lenders are required to give immediate effect to the
statutory extension and should notify borrowers of the change to the deferral
period. SBA does not require a formal modification to the promissory
note. View FAQs