
The Paycheck Protection Program is a loan initiative implemented to provide a direct incentive for small businesses to keep their workers on payroll. The Small Business Association (SBA) will forgive loans if all employee retention criteria are met, and the funds are utilized for eligible expenses.
Important aspects of the program include:
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, or Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program.
You should consult with your local lender to find out if it is participating in the program.
SBA Form 3508 is the document PPP loan borrowers must complete to request loan forgiveness. Form 3508EZ is a simplified document for eligible employers and solopreneurs. Unless you qualify to use the EZ version, you must apply with the regular Form 3508.
Like Form 3508, the EZ version requires borrowers to calculate payroll and non-payroll costs. But because of the eligibility requirements to use the form, you do not need to make adjustments for FTE and salary reductions.
Any borrower who received a Paycheck Protection Program loan can use Form 3508 to apply for forgiveness. However, since it is the most complicated form, you should only use this form if you do not qualify to use Form 3508EZ.
Form 3508 is five pages long and broken down into the following sections:
Form 3508 requires more calculations than the 3508EZ form because it has an additional calculation for borrowers who reduced their employee numbers and/or salaries. And like Form 3508EZ, the typical 3508 requires borrowers to calculate their payroll and non-payroll costs with the 60/40 rule.
Borrowers who minimize their full-time equivalent employees, employee salaries, or both also reduce their PPP forgiveness amount. This form has a calculation for evaluating how much you reduce your loan forgiveness amount for these adjustments.
Qualifying borrowers can use Form 3508EZ, the simplified version of Form 3508, to apply for PPP forgiveness. You can use this form if you meet one of the following requirements:
Form 3508EZ is three pages long and broken down into the following parts:
Gonzalez & Arrambide offer critical VCFO and accounting services to keep your bookkeeping and financials up-to-date—so you can apply for loan forgiveness knowing you have the support of a team of qualified professionals.