• Derek Carter

[1.22.21] What You Need To Know

Each week, I will cover the top three things small business owners need to know as they head into the weekend. This week the three PPP forgiveness application options will be covered.


PPP Forgiveness Applications

PPP forgiveness applications were released on January 19th. These applications cover both First and Second Draw loans. I’ll lay out a summary of each application.


Form 3508S - Applicable for borrowers with loans of $150,000 or less


  • This form does not require borrowers to provide documentation or show the calculation used to determine their loan forgiveness amount (the SBA can still ask for it).

  • If you are filing this form for a First draw PPP loan approved on or before August 8, 2020, you are required to also complete Form 3508D, which is a disclosure of controlling interests.

  • If you did not provide the lender with documentation supporting the gross receipts reduction during the Second Draw loan application process, it must be submitted with the Second Draw forgiveness application.

  • You must include NAICS Code on your application.

  • FTE and Salary/Wage Reductions - Borrowers with loans of more than $50,000 must adjust their “requested Loan Forgiveness Amount” due to statutory requirements concerning reductions in either full-time equivalent employees or employee salary and wages. The same safe harbors apply that have been discussed previously.


Form 3508EZ - Applicable for borrowers with loans of greater than $150,000 AND you can certify one of the two options below are applicable to your business.


  • You did not reduce annual salary or hour wages of any employee by more than 25% during the covered period AND you did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the covered period OR

  • You did not reduce annual salary or hour wages of any employee by more than 25% during the covered period AND you were unable to operate during the covered period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 (or last day of the covered period) by various government agencies due to COVID-19.

  • If you are filing this form for a First draw PPP loan approved on or before August 8, 2020, you are required to also complete Form 3508D, which is a disclosure of controlling interests.

  • You must include NAICS Code on your application.

  • You must submit documentation to support payroll costs and non-payroll costs with the application.

  • You do not need to submit documentation related to wage or headcount reductions.


Form 3508 - Applicable for borrowers that do not qualify for the 3508S or 3508 EZ forms.


  • If you are filing this form for a First draw PPP loan approved on or before August 8, 2020, you are required to also complete Form 3508D, which is a disclosure of controlling interests.

  • You must include NAICS Code on your application.

  • You must submit documentation to support payroll costs, headcount, and non-payroll costs with the application.

  • You do not need to submit documentation related to wage or headcount reductions.


The United States Treasury department website has a great deal of information related to all things PPP. To find answers to most of your related questions please go to https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses.


We continue to wait on additional guidance from the Internal Revenue Service related to the Employee Retention Credit program.