The Small Business Administration (SBA) issued guidance on October 8, 2020, allowing Paycheck Protection Program (PPP) loans of $50,000 or less to self-certify that they used the money appropriately and receive complete forgiveness, although borrowers will still have to provide things such as payroll provider reports. Now employers can use a further simplified form and a “check the box” paperwork process. Borrowers can use the new SBA Form 3508S for their forgiveness application, or wait for their bank, credit union or other source to update their online applications.
The new rules remove the need to show that you did not reduce head counts or salaries and, therefore, suffer a reduction in loan forgiveness. Previous regulations outlined that if an employer reduced salaries by over 25%, the amount over 25% would not be forgiven and that borrowers would also had to have documented that if they did furlough employees, they tried in good faith to rehire them. Without proof of those efforts they would have been subject to an “unforgiven” portion of their PPP loans. The new streamlined process has eliminated these requirements.
However, although the new process has been simplified, you still must take action, get forms and submit what they ask for, as they are not simply letting smaller PPP loan receivers off the hook! Go get and complete the paperwork now! These rules have been written “on the fly” as things continue to evolve during these unprecedented times, so we are urging people to get this done before the election, in case the rules change yet again!