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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

On Thursday, October 8, 2020, the Small Business Administration (SBA) released&nbsp;<a href="https://admin.wnj.com/wp-content/uploads/2022/07/SBA-Form-3508S.pdf" target="_blank" rel="noreferrer noopener">SBA Form 3508S</a>, a streamlined loan forgiveness application, and an accompanying&nbsp;<a href="https://admin.wnj.com/wp-content/uploads/2022/07/Interim-Final-Rule-PPP-Loan-Forgiveness.pdf" target="_blank" rel="noreferrer noopener">interim final rule</a>&nbsp;(IFR) simplifying the loan forgiveness process for businesses that received a Paycheck Protection Program (PPP) loan of $50,000 or less.

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SBA Form 3508S requires fewer calculations and less documentation for eligible borrowers. SBA Form 3508S also does not require borrowers to show the calculations used to determine their loan forgiveness, although the SBA may request information and documents to review those calculations as part of its loan review process.

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Eligibility and FTE Reduction Exemption

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A PPP borrower who received a loan of $50,000 or less (except borrowers who received $2 million or more when combined with affiliate PPP loans) may now use SBA Form 3508S or a lender’s equivalent form when applying for PPP loan forgiveness. Importantly, borrowers who use the new form will not be subject to the rule that requires a reduction in forgiveness amounts when full-time equivalent employees or employee wages were reduced during the covered period.

Lender Review of SBA Form 3508S and Supporting Documents

The IFR clarifies the extent to which lenders should review the application and supporting documents when they receive a new SBA Form 3508S from a borrower. According to the IFR, lenders should:

Confirm receipt of the borrower certifications contained in&nbsp;<a href="https://admin.wnj.com/wp-content/uploads/2022/07/SBA-Form-3508S.pdf">SBA Form 3508S</a>, or the lender’s equivalent form; and&nbsp;

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Confirm receipt of documentation the borrower must submit to aid in verifying payroll and non-payroll costs.

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The IFR emphasizes that accurately calculating the loan forgiveness amount is the borrower’s responsibility, and lenders can rely on a borrower’s representations. Lenders do not need to independently verify a borrower’s reported information if the borrower submits forgiveness documentation and attests to its accuracy. &nbsp; The rules surrounding PPP loans are complex and business specific. If you have concerns about the rules, please contact&nbsp;<a href="https://www.wnj.com/people/ford-j-h-turrell" target="_blank" rel="noreferrer noopener">Ford Turrell</a>,&nbsp;<a href="https://www.wnj.com/Professionals/Attorneys/Timothy-Hillegonds" target="_blank" rel="noreferrer noopener">Timothy Hillegonds</a>,&nbsp;<a href="https://www.wnj.com/people/rob-m-davies" target="_blank" rel="noreferrer noopener">Rob Davies</a>,&nbsp;<a href="https://www.wnj.com/people/matthew-m-crowe" target="_blank" rel="noreferrer noopener">Matthew Crowe</a>,&nbsp;<a href="https://www.wnj.com/people/charlie-goode" target="_blank" rel="noreferrer noopener">Charlie Goode</a>,&nbsp;<a href="https://www.wnj.com/people/jeffrey-a-ott" target="_blank" rel="noreferrer noopener">Jeffrey Ott</a>&nbsp;or your Warner attorney.

Financial Institutions

Partner

Matthew M. “Matt” Crowe

Rob M. Davies

Charlie Goode

Of Counsel

Timothy “Tim” Hillegonds

Ford J. H. Turrell

SBA Issues Interim Final Rule and Streamlined Loan Forgiveness Application for PPP Loans $50,000 and Under

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SBA Issues Interim Final Rule and Streamlined Loan Forgiveness Application for PPP Loans $50,000 and Under

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