On May 15, 2020, the Small Business Administration (SBA) published the application form that recipients of Paycheck Protection Program (PPP) loans must use to apply for full or partial forgiveness of their PPP loans. The full application package (11 pages including instructions), is on SBA Form 3508 dated 05/20. You can download a pdf HERE
What does the loan forgiveness application require?
- It must include…a completed and certified PPP loan forgiveness calculation form (see pages 3 and 4 of Form 3508),
- a PPP Schedule A (see page 6 of the Form 3508), and
- PPP recipients must also complete and retain a PPP Schedule A Worksheet (see page 9 of the Form 3508), but not submit it.
To Whom Do PPP loan recipients submit forgiveness applications? Applications for PPP loan forgiveness should be submitted to the lender from which they obtained their PPP loan, or it may be submitted electronically to their lender.
When may PPP loan recipients submit PPP loan forgiveness applications? The SBA did not answer this question. However, before PPP loan recipients submit this application they must first calculate the forgiveness amount for which they qualify and assemble supporting documentation based on data that generally will not be available until the end of the eight-week period (56 days) following the “covered period” of the PPP loan. This SBA Form 3508 also specifies October 31, 2020 as its expiration date. So, the time frame for submitting appears to begin sometime in June and end on October 31, 2020.
How do PPP loan recipients calculate their individual “covered loan” periods? SBA Form 3508 provides a basic rule for calculating the “covered loan” period and an Alternate Payroll Covered Period. Instructions for choosing the period are on the bottom of page 1. These calculations begin with estimates of your company’s expenditures on payroll and related costs, mortgage interest payments, rent, and utilities that you used in your original application for PPP funding. The forgiveness calculations require your company to update those original estimates with information on what you actually used the PPP funding for during the eight-week (56 day) period you choose – either the basic covered period that commences with the PPP Loan Disbursement Date or the Alternate Payroll Covered Period that commences with the first pay period following the PPP Loan Disbursement Date.
Team GRC will study the balance of the information provided on SBA Form 3508 and prepare additional Updates as needed to aid in your preparation of the PPP Loan Forgiveness Application that you may use or share with your local lawyer or accountant.
This GRC Update is not intended and should not be construed as legal advice to NPA members.
Members should consult their own lawyers for legal advice.
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