SBA Releases Forgiveness Application

By Freed Maxick on May, 16 2020
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PPP Update

The SBA issued the much anticipated PPP Forgiveness Application and instructions on May 15th:

https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf

In its release the SBA noted they will issue additional regulations and guidance to further assist borrowers as they complete their applications, and provide lenders with guidance on their responsibilities.

The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:

  • Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
  • Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
  • Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
  • Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined

In addition, It should be noted the instructions currently utilize 40 hours per week in calculating average FTE opposed to previous guidance suggesting the use of 30 hours. 

We will update this post once the SBA issues additional regulations and guidance. 

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