PPP Loan Forgiveness

PPP Loan Forgiveness

 SBA simplified forgiveness application, Form 3508S:

  • Use for loans each $50,000 or less and total for loans for affiliated entities less than $2 million;
  • Users of this form are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages;
  • Certain questions must be answered and certifications must be made as part of this loan application; 
  • The calculations used to determine the amount of loan forgiveness are not required as part of this application;  
  • Certain documents must be submitted with this loan forgiveness application in order to substantiate payroll costs and as well as non-payroll costs that are included in the forgiveness amount;
  • Forgiveness applicants should retain documentation to support the forgiveness calculation as well as ALL documentation related to the PPP loan for a period of six years after the date the loan is forgiven or paid in full.  Note: the SBA may request the forgiveness calculation as part of its loan review process.

Click Form 3508S to go to the SBA website and download.  

Click instructions for Form 3508S and follow carefully.

SBA releases more guidance (Procedural Notice 5000-20057) regarding entity ownership changes of the PPP borrower:

The PPP borrower is required to notify the PPP lender in writing of a contemplated change in ownership as well as documentation underpinning the proposed transaction.  Some changes in ownership may require SBA approval.

A change of ownership occurs for PPP purposes when one of the following is true:

  • At least 20% of the common stock or other interest of the PPP borrower is sold or otherwise transferred, including to an affiliate or an existing owner of the entity;
  • The PPP borrower sells or otherwise transfers 50% of its assets (FMV);
  • A PPP borrower is merged with or into another entity.

Click Procedural Notice 5000-20057 to go the SBA website and download.