PPP Loan Forgiveness Application Resources
The SBA has recently simplified the PPP loan forgiveness process, including offering a shortened application for those qualifying borrowers. Visit the US Treasury website to learn more about the CARES Act.
Application Forms & Checklist
As a first step, we suggest reviewing the Loan Forgiveness Application Form EZ Instructions to determine if you qualify. For those that meet the standards to complete SBA Form 3508 EZ to apply for forgiveness, click the link below.
For those borrowers who may not qualify for the shortened application, updated Loan Forgiveness Application Instructions for completing SBA Form 3508 and Loan Forgiveness Application Instructions for SBA Form 3508S are now available. View the application at the link below.
A revised application was made available this same day and can be downloaded at the link below.
Plains Commerce Bank has created a PPP Loan Forgiveness Checklist to be used to support your fully completed and signed SBA Form 3508 EZ or SBA Form 3508. This form must be provided as part of the forgiveness application as noted below.
Webinar Summarizing SBA Form 3508
Plains Commerce Bank has created and recorded a webinar summarizing SBA Form 3508 – Paycheck Protection Loan Forgiveness Application for your benefit.
More PPP Loan Forgiveness Information
Summary of the Forgiveness Application
- Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles. This is only available for those companies that pay employees at least biweekly.
- Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after borrowers received their PPP loan.
- Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.
- Statutory exemptions from loan forgiveness reduction based on rehiring by June 30. This will be important for those businesses that let go of employees in March through April.
- The new exemption for borrowers whose good-faith, written offers to rehire workers were declined.
- The SBA issued an Interim Final Rule on Loan Forgiveness on May 22 clarifying a number of PPP Loan Forgiveness Application items.
- The SBA issued an Interim Final Rule on SBA Loan Review Procedures and Related Borrower and Lender Responsibilities on May 22.
- Congressional approval was given to the Paycheck Protection Flexibility Act on June 4th. Amendments made to the initial PPP legislation included, the changes of which are now accounted for in the forms and links listed above.
PPP Flexibility Act of 2020 Highlights
- Extending the Covered Period to deploy loan payroll funds from 8 to 24 weeks, expiring on 12/31/2020, making it easier for borrowers to achieve full loan forgiveness
- Lowering the amount of funds required to be used on payroll costs from 75% of loan funds to 60% of loan funds, however, if the borrower now doesn’t spend a minimum of 60% of the loan amount on payroll, some or all forgiveness may be jeopardized. Forthcoming technical tweaks to the bill may soften this language.
- Borrowers can utilize the 24-week amended covered period to restore payrolls, subject to the 12/31/20 expiration, as compared to the previous 6/30/2020 deadline
- The bill expands on SBA guidance on 5/22 noting that forgiveness would not be compromised if employees were unable to rehire laid off employees, workers voluntarily cut their hours or employees were terminated for poor performance.
- The repayment period for any amount of the loan not subject to forgiveness was extended from 2 to 5 years and business receiving a PPP loan may now also delay payment of their payroll taxes due to hardship circumstances
Steps Borrowers Should Take Now
- Read the application to understand if the current plan for the business makes sense.
- Start gathering supporting documents necessary to be provided with forgiveness application which are outlined on page 10 of the application.
- If your business has employees you can calculate your average number of FTE’s over the February 15, 2019 through June 30, 2019 or January 1, 2020 through February 29, 2020. Average FTE calculation is outlined on page 7 of the forgiveness application.