The Departement of Treasury and the Small Business Administration (SBA) this week announced a revised, borrower-friendly simplified loan forgiveness application form to supplement the more robust (and complicated) Form 3508. This is good news for smaller borrowers, as it greatly simplifies the application process and potentially increases the likelihood of full loan forgiveness.
The new “EZ” version of the forgiveness application applies to borrowers that:
- Are self-employed and have no employees; OR
- Did not reduce the salaries or wages of their employees by 25%, and did not reduce the number or hours of their employees; OR
- Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.
The revised EZ forgiveness application requires less documentation and fewer calculations for eligible borrowers. Details can be found in the instructions to the new form.
Both the full and EZ applications give borrowers the option of using the original 8-week covered period (if their loan was made before June 5, 2020) or an extended 24-week covered period. These changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan.
We’ve also heard from our clients that many banks are creating customized electronic versions of the forgiveness application forms that will work seamlessly with the banks’ existing online systems.
For your reference, links to the two forms are provided below:
PPP Loan Forgiveness Application 3508 EZ Form
PPP Loan Forgiveness Application Full Form 3508
The legislation is still developing, so we will continue to monitor the forgiveness process and post updates from time to time. Check back often and be on the lookout, too, for guidance issued directly by your lender.
As always, if you need any help navigating this ever-changing environment, the KuberneoCPA Team is available to you. Contact us to discuss your particular situation, and we will walk beside you every step of the way!