The U.S. Small Business Administration has released a one-page form aimed at simplifying the application for loan forgiveness for the Paycheck protection program, as well as newly revised and updated forms to meet the requirements of the latest stimulus legislation.
The COVID-19 relief package passed by Congress last month revived the PPP with $ 284 billion in funding for small businesses that wanted lenders to help them cope with the economic consequences of the coronavirus pandemic. It requires the SBA to issue streamlined forms within 24 days of signing the legislation to simplify the application for forgiveness, as well as conditions to encourage more loans from community banks, especially for minority businesses struggling to get loans last year. to get.
“The Small Business Administration has complied with the requirement to issue the one-page PPP loan forgiveness form within 24 days of the entry into force of the Consolidated Credits Act, 2021,” writes Ed Zollars, a partner of Thomas & Zollars, CPA, on his Current Federal Tax Development Blog for Kaplan Financial Education. “The agency has also published additional updated forms.”
The revised forms include:
- Form 3508S: A one-page referral form for PPP loans of up to $ 150,000 along with instructions.
- Form 3508-EZ: A simpler application form for forgiveness for borrowers who meet specific safe harbor conditions.
- Form 3508: The complete application for forgiveness of PPP loan for those who are not eligible for the use of any of the other forms above.
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The SBA also issued Form 3508D where lenders could disclose controlling interests in the business through other companies and whether any government officials are involved in the business.
The one-page Form 3508S forgiveness application will be especially useful for small businesses that have borrowed less than $ 150,000 from the OBP.
“Form 3508S reduces the amount of information and documentation provided to the lender at the time the borrower applies for loan forgiveness,” said Justin Elanjian, partner of PPP and ERC services at Aprio, a Top 100 firm, writing article on the firm’s website. ‘However, the borrower must accurately calculate the requested loan forgiveness amount and verify the payments for the eligible costs therein. Although ‘no documentation needs to be submitted to the credit provider when applying for forgiveness of loan’, the borrower must keep all the work records / payroll documentation in his files for four years and all other documentation for three years after the date on which the loan is granted. an application is submitted to the lender and allows authorized representatives of the SBA – including representatives of its Office of Inspector General – to access such files.