On October 8, 2020, the SBA released a streamlined application, Form 3508S, designed specifically for those who borrowed less than $50,000. Although forgiveness will NOT be automatic, several of the issues that make the application for forgiveness time-consuming have been removed for these small borrowers.
Specifically, a borrower of a PPP loan of less than $50,000 is no longer required to reduce the amount eligible for forgiveness if the borrower:
- Reduces the salary or hourly wage of an employee (who earned less than $100,000 in 2019) during the “covered period” following the borrowing relative to the first quarter of 2020, or
- Reduces full-time equivalent employees (FTEs) during the covered period relative to a base period.
A borrower must still do the math and compute the amount eligible for forgiveness; the difference, however, is that small borrowers are no longer required to show their math. Be warned, however: the instructions make clear that the SBA may request from the borrower support for their computation at any time.
The application does require increased representations from the borrower.