Paycheck Protection Program Loan Forgiveness Applications Now Being Accepted

12/7/2020

Borrowers who had been approved for a Paycheck Protection Program loan are now able to submit their application for loan forgiveness to their lender. Based on the borrower’s covered period following the PPP loan disbursement, the Small Business Administration states that:

“As long as a borrower submits its loan forgiveness application within 10 months of the completion of the Covered Period, the borrower is not required to make any payments until the forgiveness amount is remitted to the lender by SBA. If the loan is fully forgiven, the borrower is not responsible for any payments. If only a portion of the loan is forgiven, or if the forgiveness application is denied, any remaining balance due on the loan must be repaid by the borrower on or before the maturity date of the loan. Interest accrues during the time between the disbursement of the loan and SBA remittance of the forgiveness amount. The borrower is responsible for paying the accrued interest on any amount of the loan that is not forgiven. The lender is responsible for notifying the borrower of remittance by SBA of the loan forgiveness amount (or that SBA determined that no amount of the loan is eligible for forgiveness) and the date on which the borrower’s first payment is due, if applicable.”

The SBA also says that borrowers can submit a loan application at anytime before the maturity date of the loan, but “if a borrower does not apply for loan forgiveness within 10 months after the last day of the borrower’s loan forgiveness covered period, loan payments are no longer deferred, and the borrower must begin making payments on the loan. For example, a borrower whose covered period ends on October 30, 2020 has until August 30, 2021 to apply for forgiveness before loan repayment begins.”

If you have any questions about your PPP loan and the forgiveness application, it is recommended that you contact your lender, as well as your accountant or attorney if you have been working with them. 

For additional resources about the Paycheck Protection Program, visit the SBA website at www.sba.gov/funding-programs/loans/covid-19-relief-options.