October 8, 2020

by Gregory S. Dowell

The SBA and the US Treasury announced today that they were releasing a simplified loan forgiveness application for the Paycheck Protection Program Loans of $50,000 or less.  The intent is to minimize the burden on small businesses that the Program puts on the smallest of businesses. 

From the Secretary of the US Treasury, Steven T. Mnuchin:  “The PPP has provided 5.2 million loans worth $525 billion to American small businesses, providing critical economic relief and supporting more than 51 million jobs.  Today’s action streamlines the forgiveness process for PPP borrowers with loans of $50,000 or less and thousands of PPP lenders who worked around the clock to process loans quickly,  We are committed to making the PPP forgiveness process as simple as possible while also protecting against fraud and misuse of funds. We continue to favor additional legislation to further simplify the forgiveness process."

The forgiveness application for loans of $50,000 or less is made on form 3508S.  The form is one page and requires a small amount of data, with an additional optional page that transmits demographic information.  Three pages of instructions are provided separately.  While there is a small amount of data to input and no documentation to attach and submit, the SBA also states that they reserve the right to inspect documentation, if necessary. 

This effort by the SBA and Treasury follows months of complaints and concerns that the SBA/Treasury was not doing enough to alleviate the burdens of the smallest of businesses that benefited from the PPPL.  Many tax professionals continue to anticipate that this is not the last word on the matter, and that the forgiveness process may be further simplified in the weeks ahead. Given that possibility, it may be worthwhile to hold off on making any such application for the immediate few weeks.