In order to get your PPP loan forgiven, you have to APPLY for forgiveness with the bank that lent you the money to begin with. This involves telling your bank how much you’ve spent on eligible costs and then proving out those costs with proper documentation.
However, there are now 3 application forms, and the documentation requirements are different for each. How do you know which one you need to fill out and what documentation you need to prepare?
There are now three forgiveness forms:
Each borrower applying for PPP forgiveness will need to use one of these forms.
3508 is the form you will use if your loan is OVER $150,000 and you DO NOT qualify for any safe harbors.
3508EZ is the form you will use if your loan is OVER $150,000 and you DO qualify for one of the available safe harbors.
3508S is the form you will use if your loan is under $150,000.
Here’s an easy decision tree to help you visualize:
Documentation Requirements are different for each of the PPP application forms. For the 3508 and 3508EZ, your bank will ask for certain documentation in order to verify your forgiveness request, but for all of the forms, you will have to maintain additional documentation just in case you are audit by the SBA down the road. We call this your “audit file” for PPP forgiveness. Your documentation will need to be retained up to 6 years after the submission of your PPP forgiveness application, so this is very important to pay attention to.
Documentation requirements for each form type can be found here:
Remember that your “audit file” will include everything you submit to the bank, but it will also include additional supporting documentation and records as well. Please be sure to keep these files in a safe place and have a digital copy (or two) as a backup!
If you need additional help figuring out your PPP forgiveness and documentation requirements, please feel free to book a call with Hannah directly HERE.
Disclaimer: This blog and the linked videos are intended for educational purposes and should not be taken as legal or tax advice. You should consult with your financial professionals about your unique financial situation before acting on anything discussed in these videos. Clara CFO Group, LLC is providing educational content to help small business owners become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience.
CEO / Founder of Clara CFO Group
Hannah Smolinski is a CPA and the founder of Clara CFO Group, a virtual CFO and consulting services firm providing small businesses with financial clarity. Her experience working for one of the world’s largest accounting firms inspired her to bring that level of financial expertise to the small business community through financial strategy, best practices, and knowledge to realize their missions.
