The U.S. Small Business Administration, in consultation with the U.S. Treasury Department, has released a loan forgiveness application for Paycheck Protection Program loans of $50,000 or less.
This action streamlines the PPP forgiveness process to provide financial and administrative relief to America’s smallest businesses while also ensuring sound stewardship of taxpayer dollars.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. Thousands of Loudoun businesses applied for and received PPP funding, receiving needed capital during the COVID-19 lockdown and early recovery. The program, along with state and local funding, helped preserve thousands of Loudoun jobs.
New applications for PPP funding were closed on August 8, 2020.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll).
Clarification on the Loan Forgiveness End Date
Fears of a late-October PPP surprise came to the SBA’s attention because the program’s loan forgiveness application forms (3508, 3508EZ, and 3508S) display an expiration date of “10/31/2020” in the upper-right corner.
The SBA placed the expiration date in the upper-right corner of the PPP loan forgiveness application forms to comply with the Paperwork Reduction Act. The date represents the temporary expiration date for the approved use of the forms, the SBA said, adding that once a new expiration date is approved, it will be posted on the forms.
Borrowers may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from the loan’s origination, depending on the borrower’s agreement.