SBA Form 3508 – PPP Loan Forgiveness Form 3508 – The eligibility of the borrower for debt forgiveness will be determined in line with the PPP rules and guidance provided by the SBA up to and including the date of this submission. If the SBA believes that the borrower was ineligible for the PPP loan, the SBA may order a lender to deny the borrower’s debt forgiveness application.
What Is The PPP Form 3508 And How Does It Work?
You (the borrower) may use the Form 3508EZ or the Form 3508S application, or you may complete this application as directed in these instructions and submit it to your lender in order to request forgiveness of your first or second draw Paycheck Protection Program (PPP) loan. If you are a first-time borrower, you may use the Form 3508EZ or the Form 3508S application to request forgiveness of your loan (or the lender that is servicing your loan). Borrowers may also submit their applications online via their lender. Each PPP loan must be applied for using a different debt forgiveness application form (see below). It is not possible to ask for forgiveness of both a first-draw PPP loan and a second-draw PPP loan using the same application form. You are required to submit a loan forgiveness application for your first draw PPP Loan before or at the same time as the loan forgiveness application for your second draw PPP Loan if your second draw PPP Loan is in excess of $150,000. This is true even if the calculated amount of forgiveness on your first drawn PPP Loan is zero.
The borrower must submit an SBA Form 3508D disclosure of a controlling interest to the lender no later than 30 days after the submission of this loan forgiveness application if the loan is approved on or before August 8, 2020, and the borrower is required to do so under the terms of a First Draw PPP Loan approved on or before August 8, 2020. See Subsection B.16 of the Small Business Administration’s interim final rule, which was published on January 6, 2021.
The PPP Loan Forgiveness Calculation Form, PPP Schedule A, PPP Schedule A Worksheet, and the (optional) PPP Borrower Demographic Information Form are the components of this application. (1) and (2) must be sent to their lender by all borrowers.
When Should You Use The Standard 3508 Form?
The normal 3508 form is for borrowers who got first- or second-draw PPP loans totaling more than $150,000 in the first or second draw period.
The 3508S and 3508EZ PPP forgiveness forms are shorter and simpler to complete than the conventional SBA Form 3508, resulting in a reduction in the amount of time you spend on them. However, if you do not fulfill the standards of the S or EZ forms, you will be required to complete the lengthier SBA Form 3508, which will take more time.
If each of the following requirements is satisfied, you will be required to complete the standard SBA Form 3508:
Initially, you did not qualify for a PPP loan since you were not a self-employed borrower, an independent contractor, or a single owner with no workers at the time of application.
It is estimated that you cut more than 25% of the salaries or pay of employees earning less than $100,000 per year in your organization.
You must still use the standard SBA Form 3508 if one or both of the following conditions are met: you are not self-employed, an independent contractor, or a sole proprietor with no employees, and you have not reduced the compensation of employees earning less than $100,000 per year by more than 25%.
You decreased the number of FTE (full-time equivalent) personnel on your payroll, but you were still able to maintain the same level of business activity that you did prior to February 15, 2020.
How To Complete Form 3508 Of The Small Business Administration
Initially, you may find the 11-page PPP forgiveness application a bit intimidating because of the length of the paperwork. Let’s take a look at how to really fill out the SBA Form 3508 when the time comes around.
Each of the four components of the official PPP forgiveness application paperwork is as follows:
- The Loan Forgiveness Calculation Form for PPP Loans
- Schedule A of the PPP
- The PPP Schedule A Worksheet is a spreadsheet that contains information on the PPP schedule.
- Form for Borrower Demographic Information in a Public-Private Partnership (optional)
Upon completion of the PPP Loan Forgiveness Calculation Form and the PPP Schedule A, all borrowers will submit these to their lender for approval.