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The Paycheck Protection Program (PPP) loan forgiveness process has been a hot topic lately, with many small business owners eager to find out how and when they can get their PPP loans forgiven. So what is the deadline for PPP loan forgiveness?
The answer is that there is no definitive deadline as of yet. The PPP loan forgiveness process is still being refined and clarified by the Small Business Administration (SBA) and the Treasury Department, and more guidance is expected to be released in the coming weeks.
What we do know is that you will have to submit a request for loan forgiveness to your lender, and they will then have 90 days to review your request and make a decision. Once your lender has made a decision, they will send you notification of their decision, as well as any required documentation, to the SBA.
So while we don’t have an exact deadline for PPP loan forgiveness at this time, we do know that the process will likely take at least a few months from start to finish. We will continue to provide updates as more information becomes available.
What is the PPP Loan Forgiveness Program?
The Paycheck Protection Program (PPP) loan forgiveness program is a federal initiative that provides small businesses with financial assistance during the COVID-19 pandemic. The program allows businesses to apply for loans of up to $10 million, which can be used to cover expenses such as payroll, rent, and utilities. Loans are 100% forgivable if at least 60% of the loan is used for payroll costs, and the remaining 40% can be used for other eligible expenses. Loan forgiveness is also available for partial usage of loan funds.
The deadline to apply for PPP loan forgiveness is December 31, 2020.
What are the Eligibility Requirements for Loan Forgiveness?
To be eligible for loan forgiveness, you must use your PPP loan for eligible expenses, which include payroll costs, mortgage interest, rent and utilities payments. At least 60% of your loan must be used for payroll costs. You have up to 24 weeks to spend the money and you must spend it all by the deadline in order to qualify for full forgiveness.
You will also need to submit documentation to your lender proving that you spent the money on eligible expenses. This can include bank statements, canceled checks, payment receipts, tax documents or employee pay stubs.
If you received a PPP loan before June 5, 2020, you have the option to use an 8-week period for loan forgiveness. If you received your loan after June 5, 2020, you must use the 24-week period.
You can apply for loan forgiveness any time before the maturity date of your loan, which is either two or five years from when you received your loan. If you do not apply for loan forgiveness within that time frame, you will have to start making regular loan payments.
What is the Deadline for Loan Forgiveness?
The deadline to apply for loan forgiveness is the earlier of 10 months after the end of your covered period or the date you receive your first bill for loan payment.
You must submit your application for loan forgiveness to your lender. Your lender has 2 business days to review and approve or deny your application.
How to Apply for Loan Forgiveness
The deadline to apply for loan forgiveness is the earlier of 10 months after the end of your covered period or when your loan balance is due.
To apply for forgiveness, you will need to submit a loan forgiveness application to your lender. This application will include documentation supporting your claim that the loan proceeds were used for eligible purposes and will need to be approved by your lender before any forgiveness can take place.
If you are approved for loan forgiveness, the forgiven amount will be excluded from your taxable income. However, if you are not approved for loan forgiveness, you will be responsible for repaying the full amount of the loan plus any interest and fees that have accrued.
The PPP loan forgiveness application deadline is currently set for August 8, 2020. However, this date could be extended if Congress passes legislation to do so.
If you have not yet applied for loan forgiveness, you should do so as soon as possible. You will need to provide documentation to support your application, so start gathering that now. If you have any questions about the process, be sure to ask your lender or seek out professional help.