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SBA Issues PPP Loan Forgiveness Guidance, A Few New Rules: What You Need To Know Now

Source: forbes.com - May 21, 2020

The SBA just issued much-awaited guidance, allowing borrowers to claim forgiveness of their Paycheck Protection Program (“PPP”) loans. The new guidance implements the single most enticing aspect of the CARES Act’s marquee borrowing initiative for small businesses and self-employed individuals—loan forgiveness. The SBA’s Loan Forgiveness Application provides detailed instructions for borrowers and the calculation of PPP loan forgiveness. It comes as a welcome development for small businesses, many of which have already begun spending their PPP funds and have been following private and informal guidance and resources while they awaited official SBA directives.

Under the new procedures, a borrower must request the forgiveness of PPP loan proceeds by filing SBA Form 3508, Paycheck Protection Program Loan Forgiveness Application. The application has four components: (1) the PPP Loan Forgiveness Calculation Form; (2) PPP Schedule A; (3) the PPP Schedule A Worksheet; and (4) an (optional) PPP Borrower Demographic Information Form. Borrowers are required to submit items (1) and (2) to their lender.

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Category: General Business