Question of the Week?
A New PPP Forgiveness Application is Out: What You Need to Know
Right from the start, the Paycheck Protection Program has been full of surprises. Yesterday evening, the Small Business Administration dropped another one: a PPP Loan forgiveness application numbered Form 3508S. This application is only for those who received $50,000 or less in total loan proceeds.
While it’s not exactly the simple attestation idea that was bounced around in Congress, the 3508S is a one page application, with a second page for demographic information (which is important to fill out as well). Instead of having to show your forgiveness amount calculation as you do on the 3508EZ, you simply certify seven things:
· The dollar amount for which forgiveness is requested does not exceed the principal amount of the PPP loan and:
o was used to pay costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest payments; business rent or lease payments; or business utility payments);
o includes payroll costs equal to at least 60% of the forgiveness amount;
o if a 24-week Covered Period applies, does not exceed 2.5 months’ worth of 2019 compensation for any owner- employee or self-employed individual/general partner, capped at $20,833 per individual; and
o if the Borrower has elected an 8-week Covered Period, does not exceed 8 weeks’ worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $15,385 per individual.
· I understand that if the funds were knowingly used for unauthorized purposes, the federal government may pursue recovery of loan amounts and/or civil or criminal fraud charges.
· The Borrower has accurately verified the payments for the eligible payroll and non-payroll costs for which the Borrower is requesting forgiveness, and has accurately calculated the forgiveness amount requested.
· I have submitted to the Lender the required documentation verifying payroll costs, the existence of obligations and service (as applicable) prior to February 15, 2020, and eligible business mortgage interest payments, business rent or lease payments, and business utility payments.
· The information provided in this application and the information provided in all supporting documents and forms is true and correct in all material respects. I understand that knowingly making a false statement to obtain forgiveness of an SBA guaranteed loan is punishable under the law, including 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a Federally insured institution, under 18 USC 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.
· The tax documents I have submitted to the Lender are consistent with those the Borrower has submitted/will submit to the IRS and/or state tax or workforce agency. I also understand, acknowledge, and agree that the Lender can share the tax information with SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of ensuring compliance with PPP requirements and all SBA reviews. _
· I understand, acknowledge, and agree that SBA may request additional information for the purposes of evaluating the Borrower’s eligibility for the PPP loan and for loan forgiveness, and that the Borrower’s failure to provide information requested by SBA may result in a determine
Quote of the Week
“Change is inevitable. Growth is optional.” – John Maxwell
Task of the Week
Check out the new 3508S. I know this will apply to a lot of you. You will likely have to exercise a little patience, though, as your lender adjusts to the new form. I suggest checking out your lender’s website as well to see how they are moving forward.