SBA Streamlines PPP Forgiveness for Loans of $50,000 and Under

October 9, 2020

The Small Business Administration last night released a much-anticipated, streamlined loan forgiveness application for Paycheck Protection Program loans totaling $50,000 or less. While eligible loans account for just 9% of overall PPP loan dollars, they amount to about two-thirds of all PPP loans.

The two-page forgiveness application, Form 3508S, includes certifications from the borrower but does not require calculations to be submitted with the application. Applicants must submit documentation verifying forgivable payroll and non-payroll expenses. Borrowers are required to retain the documentation supporting their certifications for six years, but do not need to submit it.

Once the application is received, the lender must confirm that it received the borrower’s certifications and documentation. “Providing an accurate calculation of the loan forgiveness amount is the responsibility of the borrower,” SBA said in an interim final rule, reiterating previous guidance that “lenders may rely on borrower representations. . . . [T]he lender does not need to independently verify the borrower’s reported information if the borrower submits documentation supporting its request for loan forgiveness and attests that it accurately verified the payments for eligible costs.”

SBA also provided guidance on lender responsibilities when borrowers apply for forgiveness of costs—regardless of which form they use—exceeding the PPP loan amount. In these cases, the lender should confirm that it received the borrower’s documentation and, if applicable, confirm the borrower’s calculations “up to the amount required to reach the requested Forgiveness Amount.”

Download Form 3508S.
Download the instructions for Form 3508S.
Read the interim final rule.



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