The SBA has issued new PPP loan forgiveness applications. Here’s a look at the new forms, resources, and guidance issued by the SBA.
3508S – PPP Loan Forgiveness Application Form for Loans of $150,000 or Less
Form 3508S is a one-page forgiveness application for borrowers who received a PPP loan of $150,000 or less in either the first or second draw. Previously, the form had a $50,000 threshold. If the borrower, together with affiliates, has a PPP loan amount greater than $2M, they should indicate this by marking the appropriate box on the form. For purposes of the affiliate question, first draw and second draw amounts are considered separately. Borrowers who use this form are not required to submit any supporting documentation with the forgiveness application. The SBA has issued a Procedural Notice for borrowers who have already applied for forgiveness using a different form and would like to resubmit their loan forgiveness application using Form 3508S.
The SBA updated Forms 3508 and 3508EZ, effective January 19, 2021. Borrowers of more than $150,000 in the first or second draw may use these forgiveness applications, or their lender’s equivalent form.
Form 3508D – PPP Borrower’s Disclosure of Certain Controlling Interests
Form 3508D will be used by a business to disclose any controlling interest by a government official, either directly or by a spouse, at the time the entity submitted the PPP loan application to their lender for a first draw loan received before August 8, 2020.
Resources & Guidance
The SBA also issued a new interim final rule (IFR) on the terms for loan forgiveness and an updated FAQ document on calculating revenue reduction and maximum loan amounts (including what documentation to provide) for second draw PPP loans.
Forgiveness applications for first draw and second draw PPP loans must be submitted separately.
Borrowers must consider if the forgiveness amount must be adjusted for a reduction in full-time equivalents or wage reductions for first draw loans and second draw loans separately, and only certain borrowers among those who received loans for $50,000 or less actually qualify for exemption from any reductions to the loan forgiveness amount.
As guidance is issued, we will keep you informed. Contact me today if you have questions about this information.
Our PPP Services Group is here to help. Check out our business tools and resources, such as our 13-Week Cash Flow Analysis tool and our PPP Loan Forgiveness Workbook. Visit our COVID-19 Financial Resource and Tax Center for information on related matters.
by Holly Ferguson, CPA
Holly Ferguson joined ARB in 1996 and has been a principal for the firm since 2012. Throughout her career, Holly has provided financial reporting consulting services, assisted with transactional accounting and consulting related to business acquisitions/sales, and analyzed implications and strategic implementation of new accounting standards. As the Practice Leader of ARB’s Accounting & Attest Services Team, she focuses primarily on related services for businesses, manufacturers, credit unions, and nonprofit organizations.