The SBA issued a simpler alternative Loan Forgiveness Application, SBA Form 3508S, for PPP borrowers applying for loan forgiveness for PPP loans of up to $50,000 (except for borrowers and their affiliates that received loans totaling $2 million or greater).

A borrower of a PPP loan of up to $50,000, other than any borrower that together with its affiliates received loans totaling $2 million or greater, may use SBA Form 3508S (or lender’s equivalent form) to apply for loan forgiveness.

Due to the de minimis nature of the loan amount and the likely number of affected employees, borrowers that use SBA Form 3508S (or lender’s equivalent form) are exempt from any reductions in the borrower’s loan forgiveness amount based on reductions in full-time equivalent (FTE) employees (§ 1106(d)(2) of the CARES Act) or reductions in employee salary or wages (§ 1106(d)(3) of the CARES Act) that would otherwise apply. As such, prior rules for the FTE employee reduction penalty and the employee salary and wages reduction penalty do not apply to PPP loans of $50,000 or less (except for borrowers and their affiliates that received loans totaling $2 million or greater).

The IFR clarifies that when a borrower submits SBA Form 3508S (or lender’s equivalent form), the lender must:

The borrower will not receive forgiveness without submitting all required documentation to the lender. It is the borrower's responsibility to provide an accurate calculation of the loan forgiveness amount, and the borrower attests to the accuracy of its reported information and calculations on the Loan Forgiveness Application.

Lenders may rely on borrower representations and do not need to independently verify the borrower’s reported information if the borrower submits documentation supporting its request for loan forgiveness and attests that it accurately verified the payments for eligible costs.

In some cases, a borrower may submit to a lender documentation of eligible payroll and nonpayroll costs that exceed the amount of the borrower’s PPP loan. The IFR clarifies that the amount of loan forgiveness that a borrower may receive cannot exceed the principal amount of the PPP loan. Whether a borrower submits SBA Form 3508, 3508EZ, 3508S, or lender’s equivalent form, a lender should confirm receipt of the documentation the borrower is required to submit to aid in verifying payroll and nonpayroll costs, and, if applicable (for SBA Form 3508, 3508EZ, or lender’s equivalent form), confirm the borrower’s calculations on the borrower’s Loan Forgiveness Application, up to the amount required to reach the requested Forgiveness Amount.