SBA Guidance Allows for Full Forgiveness of PPP Loans of $50,000 or Less
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October 13, 2020 | By: LendVer Staff –

The Small Business Administration in conjunction with the U.S. Treasury has issued new guidance stating that any small business that obtained a Paycheck Protection Program “PPP” loan of $50,000 or less, now has the potential to have that loan fully forgiven.

The new PPP Loan Forgiveness Application Form 3508S, is a simple two-page attestation form that enables small businesses that received a PPP loan of $50,000 or less, to easily and quickly apply for loan forgiveness without the need to input complex calculations.

This new rule could entirely eliminate PPP business loan debt of $50,000 or less, but requires borrowers applying for forgiveness to attest to seven specific certifications and meet other eligibility criteria. Roughly 3.5 million small businesses, or about 68% of all PPP loans made, could be affected by this recent forgiveness rule change. Even if a business that received a PPP loan of $50,000 or less, inevitably terminated employees, it might still receive full forgiveness of its loan.

What happened to the $150,000 cutoff?

There are a number of bills that have been introduced that propose the full forgiveness of PPP loans of $150,000 or less, but it remains to be seen whether any of those will come to fruition. Additional legislation currently being contemplated may even allow businesses that have already received a PPP loan, to apply for a second PPP loan.

Will additional PPP financing be available?

Further stimulus is still being negotiated by the Democrats and Republicans, and although it is unclear when or if additional legislation will be passed, both sides agree that further small business relief is needed. Certain PPP lenders are banking on additional stimulus being passed that will include the extension of the Paycheck Protection Program. These lenders are hoping that Congress will extend and expand the program, and are allowing businesses interested in receiving a first or second PPP loan to start a PPP loan application.


The new guidance allowing for possible full forgiveness of PPP loans of $50,000 or less, via the completion of a two-page easy application, is resulting in a sigh of relief for millions of small business owners. However, the extension of the Paycheck Protection Program is greatly needed to allow the over $130 billion still remaining in the program to get into the hands of struggling small business owners. Some lenders are encouraging small business owners to start a PPP loan application now to be ready to go as soon as additional financing is approved. There is also the possibility that additional forgiveness guideline changes could be coming, so those businesses with PPP loans over $50,000 need not despair as future changes could benefit them as well.