Has the paperwork been keeping you from filing for a Paycheck Protection Program loan? Are you hesitant to apply for a second draw loan based on your experience with the forgiveness application the first go around, even though a second loan would help you stay open? You are not alone. As I’ve mentioned before, the original application was quite tedious and time consuming. In response to public outcry, Congress mandated that the SBA come up with a simpler application form. Earlier this year, the SBA released the Form 3508S. This form is one page and specifically for businesses who borrowed less than $150,000.
Businesses who use the Form 3508S do not have to submit any supporting documentation. Instead, they answer a few questions about the loan amount, disbursement date, employee totals, covered period dates, the amount of the loan spent on payroll, and the amount of forgiveness being sought. Then the borrower must certify that it followed program rules, will retain records needed to prove compliance for several years, and is aware of the penalties for not doing so.
This form significantly improves access to the forgiveness program for small businesses. Businesses with a year-over-year revenue decrease of a least 25% for one reporting period in 2020 can apply for a second draw loan. We can guide you through how the forgiveness process has changed and simplified for many borrowers and help you evaluate whether this program is a tool your business can use to survive the pandemic. If you have questions concerning the Paycheck Protection Program, please give the Law Offices of Christy Lee, PC a call.