Treasury and Small Business Administration Make $50,000 and Under PPP Loans Easy to Forgive


By Mary Ellen Schill, Amy E. Ebeling, and Benjamin E. Streckert of Ruder Ware
Published October 9, 2020

Today by Interim Rule the Treasury Department and Small Business Administration jointly made it much easier for some Paycheck Protection Program (“PPP”) loan borrowers to get forgiveness for their loans.  If the PPP loan amount is $50,000 or less, the borrower can get full forgiveness to the extent that the loan proceeds were used for purposes permitted under PPP.  Such borrowers can ignore any reductions in full-time equivalent employees or reductions in employee salary or wages that would otherwise apply.  Under the PPP, borrowers who have spent all of their PPP loan on permitted expenses still faced reductions in their forgiveness amount if they had reductions in their FTE counts or reduced salary or wage rates during the covered period.  Not having to be penalized for headcount reductions or reductions in salaries or wage rates should be welcome relief for these small borrowers.

This forgiveness relief is not available for any borrower with a loan of $50,000 or less that has affiliates that received loans totaling $2,000,000 or more.

With this new guidance comes a new forgiveness application form.  As you can imagine, if FTE counts and salary/wage reductions are not factored into the amount of the PPP loan that is forgiven, then such information does not need to be included in the application.  To that end, we have new SBA Form 3508S, which can be used by these small PPP loan borrowers to file a forgiveness application with their lender.  The new form and instructions can be found here.

In the second round of PPP loans, loans of $50,000 or less constituted almost 69% of all loans issued (over 3,500,000 loans).  We don’t have similar data for the first round of loans (which tended to skew towards larger loans) but it is undeniable that this relief will be welcome by both borrowers and lenders.


Mary Ellen SchillMary Ellen Schill is an Attorney with Ruder Ware. Her employee benefits law practice involves the representation of both public and private sector employers in their sponsorship of all forms of employee benefit plans as well as compensation planning. She can be reached at or 715.845.4336.


Amy EbelingAmy E. Ebeling is an Attorney with Ruder Ware. She advises individuals and businesses on a variety of business and tax matters, including corporate governance and tax compliance issues, business and farm succession planning, and the negotiation of various commercial transactions. She can be reached at or 715.845.4336.


Benjamin StreckertBenjamin E. Streckert is an Attorney with Ruder Ware. He counsels family-owned and closely held businesses in entity formation, corporate governance, commercial contracts, and other day-to-day matters. He can be reached at or 715.845.4336.