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The SBA has released the PPP Loan Forgiveness Application and Instructions – Form 3508. The form and detailed instructions inform borrowers on how to apply for forgiveness of their PPP loans. The form provides a format to calculate the amount of loan forgiveness and the instructions provide additional guidance to borrowers. According to the US Treasury Department Press Release on May 15, 2020, the form and instructions include measures that are intended to assist borrowers as they complete their applications and to provide lenders with guidance on their responsibilities.

The Treasury Department’s press release points out that the SBA will soon issue additional regulations and guidance to assist borrowers and lenders as they initiate the loan forgiveness process.

The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:

• Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles. This provision helps eligible businesses seek forgiveness at the conclusion of the eight-week (56-day) “covered period” that begins on the first day of their first pay period following with disbursement of their PPP loans.
• Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan.
• Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.
• Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30.
• The addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that were declined.

We recommend that PPP loan borrowers should organize their documentation to support the Loan Forgiveness Application. Document payments of PPP loan amounts, to payroll costs and other qualifying expenses. In addition, loan recipients should continue to become familiar with the SBA’s interim final rules and frequently asked questions, especially concerning forgiveness, as released. As noted above, the SBA will be issuing additional guidance and regulations regarding PPP forgiveness and we expect the application process to evolve.

If you need help or assistance regarding PPP forgiveness, please contact one of our professions at RVG & Company.