The Consolidated Appropriations Act of 2021 (CAA) approved on December 27, 2020, included aid to small businesses. CAA provides $284.5 billion of additional funding for the Paycheck Protection Program (PPP) through the Small Business Administration (SBA). The legislation also added direction for a simplified application for PPP which covered loans up to $150,000.
The Small Business Administration (SBA) began accepting from certain lenders, first draw loans on January 11, 2021, and second draw loan applications on January 13, 2021. Applications from all lenders fully opened on Tuesday, January 19, 2021. Applications for PPP loans must be received by the SBA by March 31, 2021.
For first and second draw loans of $150,000 or less, documentation is generally not required with the loan application but will be required with the loan forgiveness application.
The CAA provides a simpler forgiveness application process for PPP loans that are not more than $150,000 as they will be forgiven if the eligible recipient signs and submits to the lender a certification, including:
- The total number of employees at the time of the PPP loan application and at the time the borrower is applying for loan forgiveness
- The amount of loan spent on payroll costs
- The original PPP loan amount and requested loan forgiveness amount.
Use Form 3508S to apply for loans of $150,000 or less. The form does not require borrowers to show the calculations used to determine their loan forgiveness amount. SBA may request information and documents to review those calculations as part of its loan review or audit process. The form may be found here
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