Small Business Administration (SBA) and Treasury Department Post Updated Paycheck Protection Program (PPP) Loan Forgiveness Applications and Instructions
On June 17, 2020, in furtherance of their efforts to update various Paycheck Protection Program (PPP) rules, guidance and forms to implement the PPP Flexibility Act, the U.S. Small Business Administration (SBA) and Treasury Department (Treasury) made available updated PPP loan forgiveness applications and instructions. There are now two forms of PPP loan forgiveness application: Form 3508 (and related instructions) and Form 3508EZ (and related instructions). The updates to the loan forgiveness applications follow action last week by SBA and Treasury to update the PPP borrower application form (Form 2483) and related interim final rules.
According to the joint press release announcing the availability of the updated forgiveness applications, SBA and Treasury indicated that the following PPP borrowers would generally be eligible to use the new three-page Form 3508EZ loan forgiveness application:
- Borrowers that are self-employed and have no employees; or
- Borrowers that did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; or
- Borrowers that experienced reductions in business activity as a result of certain health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.
The shorter Form 3508EZ requires fewer calculations and less documentation than the full Form 3508 loan forgiveness application. As with seemingly all PPP-related forms, rulemakings and guidance, the devil will be in the details, and the updated application forms may raise new questions and issues for PPP borrowers. With that in mind, the Miller Johnson cross-functional PPP team continues to review the updated loan forgiveness application forms in detail in order to work with clients and their other professional advisors to navigate the PPP loan forgiveness process.
In addition, Miller Johnson will be hosting a webinar on Friday, June 19, at 8:00am to discuss the updated PPP loan forgiveness application forms, instructions and other recent developments, guidance and rulemaking from SBA and Treasury to implement aspects of the PPP Flexibility Act. To attend the webinar, please register here: https://bit.ly/30OWi3m.
Finally, as the PPP and related compliance challenges continue to evolve, we encourage PPP borrowers to reach out to their Miller Johnson contacts to learn more about our flat-fee PPP Audit and Compliance Preparedness Program. This program offers clients a strategic solution to identify, gather and organize relevant documents and performance data to ensure their business is best positioned to comply with the ever-changing forms and rules governing the PPP. The program will also involve identifying key legal arguments so that clients are prepared for any potential enforcement action or inquiry. Additional details regarding this program are available here.