Forgiveness Applications for Borrowers with Loans of $50,000.00 or less:
The release of a new forgiveness application, 3508S, for borrowers with loans of $50,000 or less, provides you streamlined access to forgiveness. This new application requires fewer calculations and less documentation for eligible borrowers. Additionally, borrowers who use the SBA Form 3508S are exempt from reduction in loan forgiveness amounts based on reduction in full-time equivalent (FTE) employees or in salaries or wages.
We are working diligently to open the Loan Forgiveness Application section in the portal to provide you access to the 3508S application. Once available, we will have many of the fields prefilled for your convenience. Once the application is available, we will notify you. You can then login to the portal, complete outstanding fields, review, sign, and submit the application.
If you have not yet done so, please be sure to submit documentation supporting your eligible payroll costs of at least 60% and the remaining eligible 40% costs within the portal. Payroll can be used to support 100% of your loan amount.
Please note that we are using the verified supporting documentation that you have provided within the Loan Forgiveness: Document Uploads section of the portal. If you have calculated an amount for a specific eligible cost that is higher than what is displayed in the Document Uploads section, you will need to provide additional supporting documentation that must be verified before moving forward. Only verified documents will be counted in the column totals. Based on new SBA Guidance, this includes 941 tax forms for your covered loan period, proof of payment via bank statements and/or cleared checks if not using a third-party payroll provider. Additionally, a copy of your lease agreement is required if you are submitting rent as a non-payroll cost.
Important Information For Borrowers with EIDL Advances:
If you received an EIDL Advance, the SBA is required to reduce your loan forgiveness amount by the amount of the EIDL Advance (Section 1110(e)(6) of the CARES Act). If you received an EIDL Advance in excess of or equal to the amount of your PPP loan, you will not receive any forgiveness on the PPP loan because the amount of the EIDL Advance is deducted from the PPP loan forgiveness amount.
UPDATES TO YOUR DEFERRAL PERIOD:
Clarifications to the SBA Paycheck Protection Program state that if you submit to your lender a Loan Forgiveness Application within 10 months after the end of your loan forgiveness covered period, you will not have to make any payments of principal or interest on your loan before the date on which SBA remits the loan forgiveness amount on your loan to your lender (or notifies your lender that no loan forgiveness is allowed). Your lender must notify you of remittance by the SBA of the loan forgiveness amount (or notify you that the SBA determined that no loan forgiveness is allowed) and the date your first payment is due. If the loan is fully forgiven, the borrower is not responsible for any payments.
If only a portion of the loan is forgiven, or if the Forgiveness Application is denied, any remaining balance due on the loan must be repaid by the borrower on or before the maturity date of the loan. The borrower is responsible for paying the accrued interest on any amount of the loan that is not forgiven. Interest accrues during the time between the disbursement of the loan and the SBA remittance of the forgiveness amount.
If you do not submit to your lender a Loan Forgiveness Application within 10 months after the end of your loan forgiveness covered period, you must begin paying principal and interest after that period.
For example, if a borrower's PPP loan is disbursed on June 25, 2020, the 24-week period ends on December 10, 2020. If the borrower does not submit a Loan Forgiveness Application to its lender by October 10, 2021, the borrower must begin making payments on or after October 10, 2021.