SBA Form 3508S requires fewer calculations and less documentation for eligible borrowers. Borrowers only need to enter a calculated forgiveness amount, they do not need to show the steps of the calculation. Borrowers that use SBA Form 3508S are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages. Although SBA Form 3508S also does not require borrowers to show the calculations used to determine their loan forgiveness amount, they are required to submit full support with the application and the SBA may request information and documents to review those calculations as part of its loan review process.
Timing: The SBA just released this form on 10/8/2020. Most banks are probably not yet ready to start accepting this form.
Comparison to existing forms: The biggest benefit is that Borrowers using this form are exempt from calculating the FTE Reduction and Hourly/Salary Wage Reduction. Otherwise, they still need to submit about the same amount of supporting documents and they still need to calculate a forgiveness amount, even though the steps to the calculation are not included as part of the application.
Comparison to “Automatic Forgiveness” Proposed Legislation: As mentioned previously there are two bills proposed in the Senate which provide simplified forgiveness for loans $150,000 and under. These bills imply that the borrower would not have to calculate a forgiveness amount and instead would just have to sign good faith representations regarding the use of their PPP funds. It is also implied that borrowers with loans under $2 million would not be required to submit supporting documentation. Accordingly, Form 3508S is simpler than Form 3508 ad Form 3508EZ, but likely not as simple as what expected from the proposed legislation, should it pass.
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