The Small Business Administration tonight released revised loan forgiveness forms for the Paycheck Protection Program. SBA also released an updated interim final rule on PPP forgiveness and a new conflict of interest disclosure.
The revised forms include Form 3508S, which provides a streamlined forgiveness application for all PPP loans of $150,000 or less. In reviewing Form 3508S, “the lender does not need to independently verify the borrower’s reported information” if the borrower submits documentation and attests to its accuracy, but should the lender identify an error, it “should work with the borrower to remedy the issue.”
The interim final rule issued tonight consolidates previous guidance with new requirements under the Economic Aid Act, the COVID-19 relief package passed in December reauthorizing the PPP. For example, the rule incorporates the hold-harmless provision from the law for lenders that rely in good faith on borrowers’ certification and documentation, updates what payroll costs are eligible for forgiveness and reflects the process for both first-draw and second-draw PPP loans. The rule also covers non-payroll costs eligible for forgiveness, reductions in forgiveness, documentation requirements, SBA review and lender fees.
SBA specified that it will revise pre-existing FAQ documents to conform to the Economic Aid Act “as quickly as feasible.” Also mandated by the Economic Aid Act, the new disclosure form is required for PPP applicants for which at least 20% of their equity is held by certain executive branch officials, members of Congress and their spouses.
