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Revisions to PPP Loan Forgiveness and Loan Review Procedures
The Small Business Administration (SBA), in consultation with the U.S. Treasury Department, Thursday released new interim rules and a simpler loan forgiveness application for Paycheck Protection Program (PPP) loans of $50,000 or less.
There are an estimated 3.57 million outstanding PPP loans of $50,000 or less, representing approximately $62 billion of the $525 billion in total PPP loans. As businesses begin the process of applying for forgiveness for their PPP loans, the Treasury and SBA have issued additional rules to clarify certain procedures concerning PPP loans of $50,000 or less.
This interim final rule announced the SBA will issue an alternative loan forgiveness application (SBA Form 3508S), which will be available for use by borrowers who received PPP loans with total amounts of $50,000 or less. Borrowers cannot use SBA Form 3508S if, together with their affiliates, they received loans totaling $2 million or more.
Key provisions within the new guidance introduce new de minimis exemptions from the full-time equivalent (FTE) employee reduction penalty and the salary and wages reduction penalty for PPP loans of $50,000 or less.
The new interim rule also clarifies lender responsibilities with respect to the review of borrower documentation of eligible costs for forgiveness in excess of a borrower's PPP loan amount.
For additional information or assistance in completing your PPP loan forgiveness application, please contact Gray, Gray & Gray at (781) 407-0300.
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