On Oct. 8, 2020, the U.S. Small Business Administration (SBA) issued interim final rule (IFR) guidance for the Paycheck Protection Program (PPP) that includes small business loan forgiveness relief on amounts of $50,000 or less. In addition, the SBA created a new two-page application form, Form 3508S, and related instructions for borrowers with loans of $50,000 or less. A borrower using this form is exempt from both:
- Any reduction in its loan forgiveness amount on account of full-time equivalent reductions
- Any reduction in its loan forgiveness amount on account of reductions in employee salaries or wages
The rule does not exempt a borrower that is using Form 3508S from submitting the required documentation to substantiate payroll and nonpayroll costs. These requirements (including the requirement that at least 60 percent of the potential forgiveness amount was used for eligible payroll costs) are largely unchanged from the existing ones. A BKD CPAs & Advisors article provides more information on the additional guidance and new lender review responsibilities.