On January 19, 2021, the Small Business Administration (“SBA”) released updated loan forgiveness applications reflecting the changes imposed by the Consolidated Appropriations Act, 2021 (“CAA”). In addition, they added a form regarding disclosure of certain controlling interests. A link to each form, along with a brief description of changes, are as follows:

Loan Forgiveness Application and Instructions – Form 3508

Form 3508, colloquially referred to as the ‘long form,’ can now be used to apply for forgiveness on both the first and second draw PPP loans. The updated form contains the following marquee changes:

  • Alternative payroll covered period has been removed and the borrower can now presumably select their covered period.
  • The section capturing eligible nonpayroll costs now reflects 4 new lines. covered operations expenditures costs, property damage costs, supplier costs and worker protection expenditures.
  • Instructions include updates to the covered period dictating that the borrower can select any period of time between 8 weeks and 24 weeks following the disbursement of the funds, and that payroll costs must be pro-rated to match the period selected by the borrower.
  • Instructions are updated to reflect that cash compensation should not include any wages taken into account in determining employer retention credit.
  • Documentation required to be provided to complete loan forgiveness application is expanded to include support for covered operations expenditures, property damage costs, supplier costs and worker protection expenditures. Of note is that for worker protection expenditures, the borrower must provide documentation that such goods were used to comply with applicable COVID-19 guidance during the covered period.

Loan Forgiveness Application and Instructions – Form 3508EZ

Form EZ can now be used to apply for forgiveness on both the first and second draw PPP loans. The highlighted changes above to the long form were carried through to this form as well, and the update also contains the following notable changes:

  • Removal of the option for a self-employed individual with no employees to utilize this form. Instead, the form directs these individuals to utilize the Form 3508S.
  • For PPP2 borrowers making the certification that they did not reduce the number of employees or average paid hours between January 1 and the end of the covered period, the date for ignoring reductions arising from the inability to rehire individuals is changed from December 31, 2020 to the end of the covered period.

Loan Forgiveness Application Form 3508S and Instructions

Form 3508S can be utilized by borrowers whose loans are $150,000 or less. This form does contain substantial changes from the initial form released by the SBA in order to comply with the rules set forth in the CAA. Here is a summary of the form and provisions:

  • The application contains a box to check for borrowers who received loans combined with affiliates of more than $2 million dollars. This appears to indicate that borrowers in this circumstance can still utilize this form.
    • The instructions provide that borrowers who, when combined with affiliates, have loans in excess of $2 million are required to include any required reductions due to reductions in headcount or wages as described in Form 3508.
  • Borrower must disclose the covered period, amount of loan spent on payroll costs and the amount of requested loan forgiveness.
  • Borrower must make the following 2 certifications:
    • That they complied with all requirements of the PPP, the interim final rules, and guidance issued through the date of the application related to 1) eligible uses of proceeds, 2) amount of proceeds to be used toward payroll costs, 3) calculation and documentation of the revenue reduction (for PPP2) and 4) the calculation of the borrower requested forgiveness amount.
    • That the information provided is true and correct in all material respects, and the borrower understands the legal ramifications of knowingly making false statements.
  • Instructions indicate that the SBA may request from the borrower the backup calculations in arriving at the loan forgiveness amount.

Borrower’s Disclosure of Certain Controlling Interests

This new form requires borrowers to disclosure whether certain covered individuals directly or indirectly held a controlling interest in the borrower. These terms are defined as follows:

  • Covered individual means any federal government official or the spouse of a government official.
  • Controlling interest means owning, controlling or holding not less than 20% by vote of value of the outstanding amount of any class of equity. Amounts held by individual and spouse shall be aggregated.
If you have questions relating to this revenue ruling, please reach out to your
SBA Financial Assistance Expert.


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