The U.S. Small Business Administration published a one-page form with the goal of simplifying the process of applying for forgiveness of loans from the Payment Check Protection Program, along with recently revised and updated forms to meet the requirements of the latest stimulus legislation.
The COVID-19 relief package approved by Congress last month revived the PPP with $ 284 billion in funding for small businesses seeking forgivable loans to help them cope with the economic consequences of the coronavirus pandemic. It included a requirement for the SBA to issue simplified forms within 24 days of signing the legislation to simplify the forgiveness application process, along with conditions to encourage more lending by community banks, especially for minority companies that problems getting loans last year.
“The Small Business Administration met the requirement to issue the one-page form to obtain the PPP loan forgiveness 24 days after the date of enactment of the 2021 Credit Consolidation Act,” he wrote Ed Zollars, partner at Thomas & Zollars, CPA, Current blog on Federal Tax Developments for Kaplan Financial Education. “The agency also released additional updated forms.”
The revised forms include:
- Model 3508S: A one-page forgiveness form for PPP loans of up to $ 150,000 along with instructions.
- Model 3508-EZ: A simpler forgiveness application form for borrowers who meet specific safe harbor conditions.
- Model 3508: The full PPP loan forgiveness application for those who do not meet the requirements to use any of the above forms.
Mario Tama / Getty Images North America
The SBA also issued Model 3508D where borrowers could disclose controlling stakes in the business by other companies and if there is any government official involved in the business.
The 3508S single-page form forgiveness application will be especially helpful for small businesses that have lent less than $ 150,000 to the PPP.
“Form 3508S reduces the amount of information and documentation provided to the lender at the time the borrower applies for loan forgiveness,” wrote Justin Elanjian, partner in charge of Aprio’s PPP and ERC services, a company of the Top 100 article on the firm’s website. “However, the borrower must accurately calculate the amount of the requested forgiveness and verify the payments for the eligible costs included in it. In addition, although “no documentation is required to be submitted to the lender at the time of applying for loan forgiveness,” the borrower must keep all employment records / payroll documentation in its files for four years and all other of documentation for three years after the loan forgiveness date. the application is submitted to the provider and allows authorized representatives of the SBA, including representatives of its general inspection office, to access these files upon request. “