On Thursday October 8, 2020, the U.S. Small Business Administration (SBA) issued an interim final rule (the “SBA PPP Interim Final Rule”), which is effective immediately, announcing, as described below, additional guidance concerning exemptions to reduction in forgiveness and the loan review process for PPP loans of $50,000 or less.
The SBA PPP Interim Final Rule is available here.
The SBA PPP Interim Final Rule provides the following with respect to PPP loans of $50,000 or less:
Reductions to Loan Forgiveness Amount
A borrower of a PPP loan of $50,000 or less, 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. A borrower that uses SBA Form 3508S (or lender’s equivalent form) is exempt from any reductions in the borrower’s loan forgiveness amount based on reductions in full-time equivalent (FTE) employees (section 1106(d)(2) of the CARES Act) or reductions in employee salary or wages (section 1106(d)(3) of the CARES Act) that would otherwise apply.
Changes to the Loan Review Rules
When a borrower submits SBA Form 3508S or lender’s equivalent form, the lender shall:
- Confirm receipt of the borrower certifications contained in the SBA Form 3508S or lender’s equivalent form.
- Confirm receipt of the documentation the borrower must submit to aid in verifying payroll and nonpayroll costs, as specified in the instructions to the SBA Form 3508S or lender’s equivalent form.
SBA Form 3508S and the Instructions to Form 3508S are available below: