SBA Announces NEW PPP Forgiveness Process for Loans of $50,000 or Less and a Big Change in Forgiveness Standards for these Small PPP Loans

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October 9, 2020

Late on Thursday, October 8, 2020, the SBA issued new guidelines to simplify forgiveness applications for PPP Loans of $50,000 or less, effective immediately. The new instructions for completing the application and additional guidance for PPP lenders support the SBA’s goal to help the smallest PPP borrowers and allow PPP lenders to process forgiveness applications more swiftly. They include a big change in forgiveness standards for the smallest loans.

For PPP Loans of $50,000 or Less:  Borrowers using SBA Form 3508S are exempt from reductions in the loan forgiveness amounts based on reductions in FTE employees or reductions in employee salaries or wages. This change to earlier SBA PPP loan regulations is explained on page 6 of the Interim Final Rule, [see link below]. This means that SBA is planning to forgive all loan amounts of $50,000 or less that borrowers submit on the new Form 3508S and where the borrower makes the required certifications. Exemptions from loan forgiveness amount reductions in the prior versions of the SBA’s PPP regulations will still apply.

The new SBA Form 3508S is available by clicking HERE at the Treasury Department’s website .  Ignore the fact that it carries an expiration date of 10/31/2020 and looks familiar. This is the new form the SBA released on 10/08/2020. We double-checked it.

The instructions for completing Application Form 3508S for loans of $50,000 or less are found HERE at the Treasury Department’s website.

The October 8, 2020 Interim Final Regulation can be found HERE at the Treasury Department’s website.

The “guts” of the new rules are on pages 6 to 10.

For PPP Loans of $50,000.01 to $150,000:  The SBA gave no new information about forgiveness for this range of loans.

For PPP Loans of $150,000 or More: The SBA gave no new information about forgiveness of these loans. The SBA has announced its plan to audit all PPP loans of $2 million or more.


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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