PPP Loan Update: Simplified Loan Forgiveness Application

Please note: This blog is current to the date of its publication, Monday, Oct. 12. For additional updates or assistance navigating these uncertain times, please contact us or visit our SST COVID-19 resource page.


Recently, the Small Business Administration (SBA) released additional guidance to clarify the deferral period for Paycheck Protection Program (PPP) loan payments (FAQ #52) and simplify the loan forgiveness application process for loans of $50,000 or less (IFR). The latter will affect approximately 3.57 million outstanding PPP loans, which make up approximately $62 billion of the $525 billion in PPP loans.

In FAQ #52, the SBA clarifies that the extension of the deferral period under the Flexibility Act automatically applies to all PPP loans. Lenders are to immediately grant the extension and notify borrowers of the change to the deferral period. The deferral period is extended to either:

  • The date the SBA remits the borrower’s loan forgiveness to the lender OR
  • 10 months after the end of the borrower’s covered period, if the borrower does not receive loan forgiveness

The most recent IFR simplifies the loan forgiveness application process for loans $50,000 or less, including the following updates:

  • A borrower of a PPP loan of $50,000 or less, other than any borrower that together with its affiliates received loans totaling $2 million or greater, may use the SBA Form 3508S (or lender’s equivalent) to apply for loan forgiveness.
  • A borrower that uses SBA Form 3508S (or lender’s equivalent) is exempt from any reductions in the borrower’s loan forgiveness amount based on reductions in full-time equivalent (FTE) employees or reductions in employee salary or wages that would otherwise apply.

Navigating the PPP loan forgiveness process can seem daunting, but it doesn’t have to be. The experts at SST are equipped and available to guide your organization through each step. Contact us today to learn more or schedule a consultation.

Special thanks to SST Partner Emily Cook for providing the content for this post.