Ppp Loan Forgiveness Application Form 3508s

Ppp Loan Forgiveness Application Form 3508s

The U.S. Small Business Administration has released a single-page form that aims to simplify the process of applying for forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to meet the requirements of the latest stimulus legislation. 

Congress approved the COVID-19 relief package in the month of March and provided $284 billion of funding for small-scale businesses who needed loans. The funds were used to mitigate the economic effects of the coronavirus epidemic. The law required that the SBA release simplified forms within 24 hours of the legislation’s signing into law. This was done to make it easier to apply for forgiveness. It also included conditions that encourage banks in the community to lend more particularly to minority-owned businesses that had difficulty getting loans last year.

Ppp Loan Forgiveness Application Form 3508s

“The Small Business Administration met the requirements to release the one page form for the forgiveness of PPP loans by 24 days after the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released the updated forms.”

Forgiveness terms for the initial draw of PPP loans

Ppp Loan Forgiveness Application Form 3508s – For borrowers who are eligible, First Draw PPP loans are eligible to be forgiven. This happens when the loan is disbursed within an 8 to 24 week period.

  • The levels of compensation and employee pay are maintained
  • The loan proceeds are used on payroll costs and other expenses that are eligible and
  • A minimum of 60% of the funds go to payroll costs

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans to qualified customers are eligible for loan repayment when the loan is paid within an 8 24 week period.

  • Pay and worker levels are maintained in the same manner in accordance with the First Draw PPP loan
  • The loan proceeds are used on payroll and other expenses that are eligible and
  • Minimum 60% of proceeds go to the cost of payroll
  • What is the best time to apply for loan forgiveness

After all loan’s proceeds have been used the borrower is eligible for forgiveness. Borrowers may apply for forgiveness at any point up to the date of maturity. If they do not file for forgiveness within 10 months after the last day of the covered period and the loan is not renewed, PPP loan payments can no longer deferred and borrowers will begin making payment to their PPP lender.

Download Ppp Loan Forgiveness Application Form 3508s

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