Small businesses that took $50,000 or less in Paycheck Protection Program (PPP) loan money will now have access to a simplified forgiveness process due to ant interim final rule recently issued by the Small Business Administration. The SBA noted that there are about 3.57 million PPP loans under $50,000, and, of those, 1.71 million were made to sole proprietorships with 0-1 employees. Because the borrowers, by virtue of having only one employee at most, did not really reduce salaries or wages or the number of employees, the government decided that such simplifications would have little effect on the program's finances. The interim final rule does not apply, however, to any borrower that, together with its affiliates, received loans totaling $2 million or greater. The rule is effective without advance notice and public comment.

Borrowers that qualify under the rule may now use the new SBA Form 3508S, which allows them to effectively self-certify their compliance with the loan terms. This includes the requirement to provide the lender documents verifying payroll costs, the existence of obligations and service (as applicable) prior to Feb. 15, 2020, and eligible business mortgage interest payments, business rent or lease payments, and business utility payments. The lender, in turn, must confirm the receipt of the certifications contained in the new SBA forms, as well as their receipt of the borrower's documentation.

The borrower cannot receive forgiveness without submitting all required documentation to the lender. The lender does not need to independently verify the borrower’s reported information if the borrower submits documentation supporting its request for loan forgiveness and attests that it accurately verified the payments for eligible costs.

The Foundation for Accounting Educations Business and Industry webcast on Oct. 21 will feature, among other things, an afternoon session that discusses PPP loans and other pandemic-era financing.