By SEMA Washington, D.C., Staff
The U.S. Treasury issued a new loan forgiveness application form (Form 3508S) for PPP loans of $50,000 or less in an effort to simplify the loan-review process for these smaller loan amounts. The new form is two pages rather than five, and many questions meant to confirm that the loans were used as intended for supplying payrolls and covering fixed costs have been removed. Nevertheless, the form still requires the borrower to submit significant documentation (bank statements, tax forms, payment receipts, employee benefit statements, etc.).
The PPP has provided 5.2 million loans worth $525 billion to American small businesses while supporting more than 51 million jobs, according to the U.S. Treasury. While SEMA welcomes the revised loan-forgiveness form, the Association has joined a coalition of companies and organizations seeking a more streamlined process so that small business owners can invest in jobs and support their local economies rather than spend time and resources on paperwork. Several SEMA-supported bills are being considered in the U.S. Congress that would further simplify the PPP forgiveness process, especially for loans of up to $150,000, while also protecting against fraud and misuse of funds. More than 86% of issued loans are for $150,000 or less, according to the U.S. Small Business Administration (SBA).
The SBA began accepting loan forgiveness applications on August 10, but only a small percentage have been submitted by lending institutions or processed by the SBA. The lenders have said that the process is too onerous and time-consuming. Under the program, a lender has 60 days to process and submit applications to the SBA once received from the borrower. The SBA has 90 days to make a final decision and send the forgiven funds to the lender.
Applications granted less than the anticipated full forgiveness by the SBA will be problematic for both the lender and borrower.
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