November 05, 2020

New, Simpler PPP Loan Forgiveness for Loans of $50,000 or Less

Recipients of Paycheck Protection Program (PPP) loans of $50,000 or less now have a simpler process to follow to seek loan forgiveness.  Last week, the Treasury and the Small Business Administration released a new application and interim final rule to streamline the forgiveness process for these borrowers and lenders.

Under the new Interim Final Rule, PPP borrowers of $50,000 or less will not be required to perform potentially complicated FTE or salary reduction calculations. These borrowers are exempted from any reductions in forgiveness based on reductions in full-time-equivalent (FTE) employees or reductions in employee salary or wages. Borrowers still have to make some certifications and provide documentation to the lender for payroll and non-payroll costs.

The new application form can be used by PPP borrowers applying for forgiveness on loans with a total loan amount of $50,000 or less unless those borrowers, together with their affiliates, received loans totaling $2 million or more. Instructions for Form 3508S also were released.