PPP Loan Forgiveness Application Changes Again
Post date
June 26, 2020
Body
On Tuesday, June 16, 2020 the SBA issued and updated Form 3508, Paycheck Protection Program Loan Forgiveness Application. In addition to the update, Form 3508EZ was issued, a condensed version of the form for certain filers. The key takeaways and questions from these applications are below:
- Business Activity Level: Businesses who are not able to return to the same level of business activity during the covered period will be exempt from the Full Time Equivalent calculations.
- Owner “Windfall” Provision: Compensation received during the covered period must not exceed 2019 compensation.
- The 60% Sliding Scale: There was concern based on the letter of the law that a 60% payroll cliff would be instituted on forgiveness calculations.
- Early Application: In electing the 24-week covered period, applicants can apply early, once the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness. Safe Harbor thresholds and calculations will be done based on the application date to the extent it is prior to the end of the covered period or December 31, 2020, whichever comes first.