The SBA and the US Treasury have released a new forgiveness application for borrowers with Paycheck Protection Program (PPP) loans less than $50,000. In addition to simplifying the application, a borrower can receive forgiveness for their loan even if they have laid off employees since receiving their PPP loan.
Borrowers with loans less than $50,000 must complete the SBA’s new, streamlined form, Form 3508S. This form is specifically designated for PPP loans of $50,000 or less.
The SBA has reported that about half of the 3.6 million loans under this threshold went to sole proprietors or independent contractors. These borrowers didn’t have employees that they could retain. The SBA made the change to apply to all loans less than $50,000, regardless of whether or not the borrower has (or had) employees.
Previously, PPP loans less than $50,000 had to meet the employee retention requirements to qualify for full forgiveness. For loans greater than $50,000, the amount forgiven may still be reduced if the borrower has laid off employees or reduced wages.
It might. Second Draw loans are still brand new. Specific guidance on how loan forgiveness for Second Draws will be handled has not yet been released. While Second Draws seem to be following similar parameters as First Draws, it’s too soon to say.
Ready to secure your potentially-forgivable financial safety net through PPP? Apply now.