Media | May 19, 2020

SBA Paycheck Protection Program Forgiveness

On Friday, May 15, 2020 the SBA and Treasury released the Paycheck Protection Program (PPP) Loan Forgiveness Application, SBA Form 3508. This application package includes:

• Form of application and supporting schedules required to be submitted to lenders by those seeking forgiveness of PPP loans
• Detailed instructions, including documentation required by SBA and optional documentation for lenders, on how to complete Form 3508 together with Schedule A and attachments
Additional clarifications provided in SBA Form 3508 included:
• Options for the borrower to compute payroll costs using an “alternative payroll period” which is to allow businesses to align payroll cost as defined in the PPP application with the borrower’s normal payroll cycles
• Providing for some flexibility in including eligible payroll and non-payroll expense paid or incurred during the eight-week (8) after receiving the PPP loan
• Statutory exemption implementation guidance for loan forgiveness reduction based on rehiring by June 30
• New exemption for the loan forgiveness reduction for borrowers, who in good faith, provided a written offer to rehire workers but were declined.

Becoming familiar with SBA Form 3508 and instructions is the first step in the process to obtain loan forgiveness. We continue to receive questions from our clients and friends regarding definitions in the original PPP documents that have not been clearly addressed. We anticipate further clarification and possible changes to the calculation and/or required documentation. One initial observation is that significant and well organized documentation will be required to obtain forgiveness. For example, some of the required documentation incudes payroll records by employee, full time equivalent calculations, bank statements, payment receipts, cancelled checks, account statements, rental agreements, lease agreements, loan documents and amortization schedules.

We are currently developing a tool kit to be used to assist clients with their PPP loan forgiveness documentation and computation. The PPP loan forgiveness documentation and related calculations are complex, and NCA is here to help!

These are difficult and unfamiliar times we live and work in. We believe businesses needs to begin the process of understanding the PPP Loan Forgiveness Calculations and to begin gathering the required documentation to support their computations. Taking these important steps now should help to avoid unforeseen or unplanned issues.

The following is a link to the SBA PPP Loan Forgiveness Application –

Please contact us if we can be of assistance.

Our goal is to keep our clients, friends, and colleagues abreast of the rapidly changing rules surrounding the CARES Act and related guidance from our Federal and State Governments in response to COVID-19.

The rules and definitions of terms in the guidance are constantly changing based on interpretations by the SBA, Treasury, and other agencies. We will do our best to inform you of additional changes or updates to the published guidance. 

To complete the forgiveness computation you will need to determine the best approach for your Company given your unique circumstances. Legal counsel may be necessary for specific interpretations of the CARES Act and other related guidance.


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