SBA simplifies PPP loan-forgiveness application for borrowers of $50K or less

The U.S. Small Business Administration, in consultation with the Treasury Department, recently rolled out a simpler loan-forgiveness application for Paycheck Protection Program (PPP) loans of $50,000 or less. 

The application, called SBA Form 3508S, requires fewer calculations and less documentation for eligible borrowers. Perhaps most importantly, borrowers that use SBA Form 3508S are exempt from reductions in loan-forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages. The form also does not require borrowers to show the calculations used to determine their loan forgiveness, per the SBA. However, the agency may request information and documents to review those calculations as part of its loan-review process.

The agency contends the new application streamlines the PPP forgiveness process to provide financial and administrative relief to small businesses, while still protecting taxpayer funds.

“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,” U.S. Treasury Secretary Steven T. Mnuchin said in an Oct. 9 news release. “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.”

One local, veteran banker that works with area small businesses welcomed the forgiveness-application changes. 

“That’s a big help for those companies that only borrowed $50,000 or less,” says Lee DeAmicis, regional manager of business banking at M&T Bank in Syracuse. He has been with the bank for 25 years. “It’s a simpler application to fill out. The application itself is certainly streamlined.”

DeAmicis, who spoke with CNYBJ on Oct. 20, says he hasn’t heard talk that the simplified application would also be eventually rolled out to companies who borrowed more PPP money, such as up to $150,000. Instead, there’s been more discussion that perhaps Congress will pass further legislation to forgive all loans under $150,000 as long as companies used the funds properly. “I think some small businesses will kind of delay” to see if that does happen, DeAmicis says.

M&T Bank made nearly 2,000 PPP loans in the Syracuse and Utica markets for $416 million. Of that total, about $250 million went to small businesses, with the remainder going to slightly larger companies.

The average loan amount was almost $209,000. These loans helped companies that employed 40,000 people.

Companywide, Buffalo–based M&T helped more than 35,000 small businesses receive more than $7 billion through PPP loans.

M&T Bank had already submitted more than 500 loan-forgiveness applications on behalf of clients to the SBA for approval, companywide, as of Oct. 16, according to DeAmicis. “We’ve heard that they’ve approved somewhere in the mid-200s,” he adds.

SBA and Treasury have also eased the burden on PPP lenders, allowing lenders to process forgiveness applications more swiftly. 

SBA began approving PPP forgiveness applications and remitting forgiveness payments to PPP lenders for PPP borrowers on Oct. 2. 

The simpler loan-forgiveness application is available at https://www.sba.gov/sites/default/files/2020-10/PPP%20Loan%20Forgiveness%20Application%20Form%203508S.pdf

The instructions for completing the streamlined loan-forgiveness application are viewable at https://www.sba.gov/sites/default/files/2020-10/PPP%20Loan%20Forgiveness%20Application%20Form%203508S%20Instructions.pdf