SBA Releases PPP Loan Forgiveness Application

Kati Sanford Goodner and Davidson Lentz

As this is a fast moving topic, please note that this article is current as of 5/19/20. For contact information, please click here.

On Friday, May 15, 2020 the SBA and Treasury Department released the Paycheck Protection Program (“PPP”) Loan Forgiveness Application (which can be found here: Forgiveness application) providing more detail and giving Borrowers who received PPP funds more specific guidance on how loan forgiveness under the CARES Act will be determined. SBA Form 3508 includes instructions for completing the Loan Forgiveness Application, as well as a Schedule A (and Schedule A Worksheet) that calculates the portion eligible for loan forgiveness and a list of documents that each Borrower must submit with its Loan Forgiveness Application. Form 3508 also includes a voluntary Borrower Demographic Information Form that is optional for Borrowers to complete. Notably, the Loan Forgiveness Application addresses several outstanding questions that have been circulating since the PPP Loan Application process first opened, including:

1.      The ability to elect an Alternative Payroll Covered Period for Borrowers whose PPP loan funding date does not align with their regular payroll.

2.     Clarification on the question of whether unused PPP loan funds may be returned without counting against the Borrower in the 75% payroll threshold.

3.     New Information and Methods to Calculate Average Full Time Employees for Purposes of Loan Forgiveness.

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