The SBA just issued new guidance and form for PPP loan amounts of less than $50,000. The new 1 pager requires certification of 7 statements (see attached form.)
All of these certifications also appear on the 3508EZ as well.
However, the 3508S removes three important certifications:
The Borrower did not reduce salaries or hourly wages by more than 25 percent for any employee during the Covered Period or Alternative Payroll Covered Period.
The Borrower did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period.
The Borrower was unable to operate between February 15, 2020, and the end of the Covered Period at the same level of business activity as before February 15, 2020 due to compliance with requirements established or guidance.
In short, this form removes any reduction of forgiveness if the borrower had to let go of employees and didn’t hire them back and/or reduced wages. That eliminates a very onerous and tedious part of the application process for small borrowers.
The instructions to the form still require borrowers to submit verification of payroll and non-payroll expenses for the covered period. That means forthose of you with employees or non-payroll expenses included in your forgiveness calculation, you still need to gather and submit bank statements, tax forms, payment receipts, etc. with the application. You must also keep that documentation for six years after the date the loan is forgiven or repaid in full, in case representatives of the SBA asks for it.
Check with your lender on when and how they will accept the new 3508S form.
While this form does not go as far as pending legislation that would have allowed a simple attestation that the funds were spent, this is a simpler process for the 3.5 million PPP loans that are less than $50,000.
If you need to talk through specific options for your business, Molly, Paula, Myra, and I are here to help. Schedule a 30 minute consultation via Zoom where we will discuss your specific business situation for only $49. If you have any questions, feel free to reach out to any of us or email PPPHelp@EDGeBusinessPlanning.com. And keep checking our emails, blog, and social media for updates.