The Small Business Administration and the U.S. Treasury Department this month announced a simpler forgiveness application (Form 3508S and Instructions) for Paycheck Protection Program (PPP) loans of $50,000 or less. Loan forgiveness effectively turns a PPP loan into a grant.

Important, dealer-borrowers eligible to use Form 3508S are not subject to a reduction in forgiveness based on a reduction in the number of full-time employees or a reduction in employee salaries and wages. 

However, they still must make required certifications and document that PPP loan proceeds were spent on appropriate payroll and non-payroll costs. 

 

Note: A dealer-borrower with a PPP loan of $50,000 or less may not use SBA Form 3508S if, together with its affiliates, it received PPP loans totaling in excess of $2 million. 

For more information on affiliation issues, see the National Automobile Dealers Association’s affiliation guide and related FAQs.