Update on the PPP loan forgiveness application

The SBA and US Treasury released a new, simpler PPP loan forgiveness application Form 3508S for PPP borrowers who have loans of up to $50,000 – either employer or self-employed.

(Photo credit Giorgio Trovato – unsplash)

Who can use this simpler application form?
Only businesses that received PPP loans up to $50,000 can use this new Form 3508S.

If your loan is greater than $50,000—or if you and your affiliates received a total of $2 million or more in PPP funds—you aren’t eligible to apply using this simpler form. Instead, you’ll complete either Form 3508 or 3508EZ, which will be available at a later date.

What documents do I need to submit with this simpler forgiveness application?
You’ll need to submit documents showing:

1) Payroll expenses during the covered period (which can include third-party payroll service provider reports, bank statements, tax forms, payment receipts); and

2) Non-payroll expenses eligible for forgiveness (account statements from your lender/mortgage provider, landlord, and utility providers.)

Employers

If you applied for your PPP loan with a Form 940, 941, 944, or W-2, please gather the following documents. Note that if you use Square Payroll as your payroll provider, we will automatically enter your payroll, wage, and employee compensation information—so you need not upload documents related to those expenses.

• Payroll/Wages: taxable wage filings such as a Quarterly Form 941
• Employee compensation: third-party payroll provider reports
• Benefits: third-party payroll provider reports or benefit provider account statements
• Utilities: utility account statements verifying payments for February 2020 and each month during your covered period
• Rent: monthly landlord (lessor) account statements for February 2020 and each month during your covered period
• Mortgage interest: lender account statements for February 2020 and each month during your covered period

Non-employers or self-employed

If you applied for your PPP loan with a Form 1040 Schedule C, please gather these documents:

• Payroll/Wages: 2019 Form 1040 Schedule C
• Utilities: utility account statements verifying payments for February 2020 and each month during your covered period
• Rent: monthly landlord (lessor) account statements for February 2020 and each month during your covered period
• Mortgage interest: lender account statements for February 2020 and each month during your covered period

Note: You are not required to show the calculations used to determine your PPP loan forgiveness amount. However, the SBA may request more information and documents while reviewing your application—and for up to six years after your loan is forgiven. Keep all of your documents just in case.

When do I need to complete and submit my forgiveness application?
You have up to 10 months after your covered period ends to apply for forgiveness.

When do I need to start repaying my loan?
You aren’t required to start making loan repayments until your forgiveness decision is determined. When repayment does begin, any loan amount that is not forgiven will need to be repaid, along with a low, 1% fixed annual interest rate on the amount not forgiven. You’ll repay through monthly payments automatically debited from your Square linked account.

Note: if you do not apply for forgiveness, your business will need to start repaying its loan within about 16 months of receiving the funds.

You might be interested: Second round of PPP loans: Why you should act now and where to go

How can I stay updated about future PPP loan forgiveness changes?
We’re keeping a close eye on loan forgiveness developments as they come in from the SBA.  We’ll continue to update this page to provide you with the most up-to-date information.

This information does not constitute legal or financial advice. Please contact your financial institution to verify the status of your PPP loan forgiveness. 

This is a summary of information distributed by one of our Cash Apps vendors Square.