PPP Update

In a move seemingly to get ahead of Congress’ intentions, the  SBA issued a new forgiveness application form for PPP borrowers with loans of $50,000 or less.  It is a one page form.  Seriously.

Here are the details:

• Form 3508S only applies to borrowers with loans of $50,000 or less

  • Total “other entity” combined PPP loans cannot exceed $2 million – don’t worry, it probably doesn’t apply to you.

• There is NO reduced FTE or reduced employee wage penalty

  • That means you don’t have to take the time to test any FTE reductions or wage reductions. This is a HUGE timesaver.

• Documentation still must be submitted. This includes:

  • Payroll register and evidence of payroll paid for the covered period

  • Documentation to verify other expenses, such as rent and lease payments and other qualified expenses

HOWEVER…

Don’t submit your loan for forgiveness tomorrow.  Why?  The lenders have made themselves so reliant on electronic submission forms and portals that it will take some time to change their forms to comply with the new 3508S.  I’m guessing 2 to 3 weeks.

For the lenders that were taking paper forms, they can start processing tomorrow.  Well, maybe not; let’s give them the weekend to get the process set up.  Check with your lender!

So why now?  Two reasons.  One, I believe SBA read the tea leaves coming from Congress on their intentions for the smaller loans.  Two, SBA has been taking notice of the nature of the loans that were less than $50,000.  They observed that for a vast majority of the loans there wasn’t any point in asking for the FTE or wage test documentation.  But, they still want proof of the funds being used appropriately, including at least 60% for payroll.  I think that is a good idea.

Now THAT’S the way to end a week!