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PPP Loan Forgiveness Process Eased For Borrowers of $50,000 or Less

On October 8th, 2020 the U.S. Small Business Administration (SBA) released a simpler loan forgiveness application for Paycheck Protection Program (PPP) loans of $50,000 or less. The SBA is hoping this simpler forgiveness process will help the countries smallest businesses who were impacted by COVID-19 by removing some of the red tape around forgiveness.

The new form “3508S” will require fewer calculations and less documentation from borrowers who received a loan of $50,000 or less. The overall interim guidance also removes some of the challenge’s lenders faced when reviewing forgiveness applications. Simplifying both processes should result in a more expedient and less confusing process. Borrowers should note this is not automatic forgiveness. Borrowers must submit the new form to qualify to have their PPP loan forgiven.

Key Points for PPP Borrowers of $50,000 or less that use SBA Form 3508S:

  • The new guidance removed the need to show that the borrower did not reduce head count or salaries of FTE. (Which previously meant a reduction in loan forgiveness) 
  • The new Form does not require borrowers to show the calculations used to determine their loan forgiveness amount.
  • It does require documentation for payroll costs, mortgage interest, rents, and utilities used to obtain forgiveness to be submitted to the lender along with the form.
  • The completed form should be submitted to the borrower’s lender.

Additional Links

View the simpler loan forgiveness application.

View the instructions for completing the simpler loan forgiveness application.

View the Interim Final Rule on the simpler forgiveness process for loans of $50,000 or less.


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