Paycheck Protection Program (PPP) Loan Forgiveness Update
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Perkins is ready to assist you with your PPP Loan Forgiveness calculation. Have you spent all of your PPP Loan money and your lender is accepting loan forgiveness applications? Please contact your Perkins team to get the process started.
SBA & Treasury Simplify Forgiveness of PPP Loans of $50,000 or Less
The Small Business Administration and Treasury are making it easier for borrowers to get their PPP loans of $50,000 or less forgiven with the simpler loan forgiveness application, using the new SBA Form 3508S (unless they and their affiliates received loans totaling $2 million or more). “SBA Form 3508S requires fewer calculations and less documentation for eligible borrowers. Borrowers that use SBA Form 3508S are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages,” per the form instructions.
Even though Form 3508S does not require the borrower show the calculations used to determine their loan forgiveness amount, the SBA and lender may request information and documents to review those calculations.
Deadline to Apply for Loan Forgiveness
In the most recent FAQ provided by the SBA and Treasury, a common question was answered regarding when borrowers need to apply for loan forgiveness:
The PPP loan forgiveness application forms (3508, 3508EZ, and 3508S) display an expiration date of 10/31/2020 in the upper-right corner. Is October 31, 2020, the deadline for borrowers to apply for forgiveness?
No. Borrowers may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from loan origination.
However, if a borrower does not apply for loan forgiveness within 10 months after the last day of the borrower’s loan forgiveness covered period, loan payments are no longer deferred, and the borrower must begin making payments on the loan. For example, a borrower whose covered period ends on October 30, 2020, has until August 30, 2021, to apply for forgiveness before loan repayment begins.
The expiration date in the upper-right corner of the posted PPP loan forgiveness application forms is displayed for purposes of the SBA’s compliance with the Paperwork Reduction Act and reflects the temporary expiration date for the approved use of the forms. This date will be extended, and when approved, the same forms with the new expiration date will be posted.
See the SBA site for more details.