Finally! The SBA Releases One-Page PPP Loan Forgiveness Application
February 18, 2021
WASHINGTON, DC -
The Small Business Administration (SBA) released a slew of PPP guidance and updates yesterday, including the new simplified, one-page application for borrowers of loans for $150,000 or less – Form 3508S. Before the program reopened that threshold covered about 4.6 million of the program’s total 5.2 million loans.
Small loans predominate in the new round of PPP loans opened up last week, too. According to the information released yesterday, the SBA approved 60,000 paycheck protection loans submitted to nearly 3,000 lenders for over $5 billion between Monday January 11th and Sunday January 17th. That was the week set aside for community financial institutions that specialize in serving underserved communities. As of yesterday, PPP was open to all lenders.
These figures suggest that, overall, smaller borrowers are having an easier time getting funds. The new forgiveness application make PPP even more attractive to struggling businesses by streamlining the process for getting loans forgiven. Here’s a in-depth look at the app.
The loan application is shorter and easier to complete than ever. It’s only one page long, and, significantly, it no longer requires you to show the calculations you use to determine how much of your loan should be forgiven.
The first section asks for identifying information, including, for the first time, your NAICS code (or industry classification). This is especially important for borrowers with code beginning with 72 — that’s restaurants, hotels, food service and hospitality. For companies in these industries, the maximum loan amount is 3.5 times average monthly payroll, rather than 2.5 times average monthly payroll. There’s one other significant change. The application no longer requires information from your Economic Injury Disaster Loan (EIDL) advance. These funds were originally supposed to offset your forgiveness amount but no longer do so.
You’ll have to gather other information, as well, including:
SBA PPP Loan Number (the loan number assigned by the SBA at the time of approval)
Lender PPP Loan Number (the loan number assigned to the PPP Loan by your lender)
PPP Loan amount
PPP Loan disbursement date
Employees at the time of loan application
Employees at the time of forgiveness of the application
The covered periods (this is the eight- to 24-week period following the disbursement of the loan)
Amount of Loan Spent on Payroll Costs
Requested Loan Forgiveness amount
Can’t find or don't have your SBA or Lender Loan number? Your bank should provide you with it or complete that portion for you.
Next you have two certifications.
The first certifies that you complied with all PPP rules, including:
Eligible uses of PPP loan proceeds (remember this list was recently expanded)
The amount of PPP loan proceeds that must be used for payroll (at least 60% of the requested loan forgiveness amount)
The calculation and documentation of your revenue reduction (if applicable), and
The calculation of your loan forgiveness amount.
Again, the key here is that you are certifying that you did these things, but you don’t have to show the work behind them.
The second certification is that the information you provide is true and correct “in all material aspects.” Knowingly making a false statement could result in up to five years in prison and/or a fine up to $250,000. If you deceive a federally insured institution, that increases to up to 30 years and or a fine of not more than $1,000,000.