The SBA in consultation with the Treasury Department released a simpler loan forgiveness application for PPP loans of $50,000 or less (SBA Form 3508S) with separate instructions and Interim Final Rule (#25). SBA began approving PPP forgiveness applications and remitting forgiveness payments to PPP lenders on October 2, 2020.

For SBA Form 3508S, the lender shall:

  • Confirm receipt of the borrower certifications contained within the Form;

  • Confirm receipt of the documentation the borrower must submit to aid in verifying payroll and nonpayroll costs, as specified in the SBA Form 3508S instructions; and,

  • If applicable, confirm borrower’s calculations on the Loan Forgiveness Application, up to the amount required to reach the requested Forgiveness Amount.


SOP 50 10 6 Hot Topics 

During the national 7(a) Connect call on October 6, SBA’s Office of Capital Access touched on new requirements per SOP 50 10 6, which are:

  • Executed Authorizations – For all 7(a) loans, the lender MUST submit a copy of the final executed loan authorization via E-Tran Servicing (including any modifications or amendments) (page 433).

  • Citizenship – Businesses must be at least 51% owned or controlled by US Citizens or those with Lawful Permanent Residence status (page 157).

  • – Must check Agents, small business applicants, lender employees, Lender Service Providers, and 504 contractors (page 171).


Updated PPP FAQs – Deferment Clarification

The SBA and Treasury updated PPP FAQs this week to address PPP deferment and when payments may be due. Question 52, outlined below, provides guidance.

Question: The Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act) extended the deferral period for borrower payments of principal, interest, and fees on all PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period). Previously, the deferral period could end after 6 months. Are lenders and borrowers required to modify promissory notes used for PPP loans to reflect the extended deferral period?

Answer: The extension of the deferral period under the Flexibility Act automatically applies to all PPP loans. Lenders are required to give immediate effect to the statutory extension and should notify borrowers of the change to the deferral period. SBA does not require a formal modification to the promissory note. A modification of a promissory note to reflect the required statutory deferral period under the Flexibility Act will have no effect on the SBA’s guarantee of a PPP loan.

PPP Changes of Ownership Guidance

SBA Information Notice 5000-20057 provides guidance on the Changes of Ownership for Paycheck Protection Program (PPP) loans.

Prior to the closing of any change of ownership transaction, the PPP borrower must notify the PPP Lender in writing of the contemplated transaction and provide the PPP Lender with a copy of the proposed agreements or other documents that would effectuate the proposed transaction. No portion of an SBA loan used in the financing of an ownership change may be used to finance the escrow account.

There are different procedures depending on the change of ownership circumstances as set forth in the Notice. In all cases, the PPP Lender is required to continue submitting the monthly 1502 reports (on or before the 15th of each month) until the PPP loan is fully satisfied.

EIDL Subordination Requests


  • Borrower must provide SBA written authorization to release information to the originating lender and acknowledgement of a lien subordination request.

  • Scan the following documents and attach to an email: 

    • Name and address of Borrower along with EIDL loan number and loan amount.

    • Name and address of the originating lender.

    • Name, address, email and phone number of a contact person for the bank to send subordination agreement, if approved.

    • Amount and purpose of the proposed loan.

    • Copy of the filed SBA UCC-1 Financing Statement.

  • Submit the subordination request to:

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SBA Procedural Notice
Temporary Changes & Revisions
PPP Loans FAQ's
PPP Loan Forgiveness Application Instructions
PPP Loan Forgiveness Application