What We Know About PPP Loan Forgiveness
Updated: Jan 19, 2021
Since closing on August 8, 2020, the SBA has approved over 5.2 million applications amounting in over $525 billion in PPP loans. This loan was created to help small businesses keep their workers on payroll and may be forgiven if businesses meet all employee retention criteria and the funds are used for eligible expenses.
To be eligible for loan forgiveness, businesses must use the funds during the 8- or 24-week period after disbursement for:
Eligible payroll costs
Payments on business mortgage interest payments
Once you have used all the loan proceeds, you may apply for forgiveness up to the maturity date of the loan. You must apply for forgiveness within 10 months after the last day of the covered period or else payments will no longer be deferred and you must start making loan payments to your PPP lender.
How to Apply for Forgiveness
To apply for forgiveness, you will need to speak with you PPP lender since each lender has different requirements. They will provide you with the form you need to fill out and let you know what supporting documentation you will need.
Loans of $50,000 or Less
For those who got a loan of $50,000 or less, the SBA and Treasury Department released a simpler loan forgiveness application, which began on October 2, 2020. Learn More.
Eligible Paycheck Protection Program Expenses Now Deductible
On January 6, the IRS issued guidance allowing deductions for eligible expenses made under the Paycheck Protection Program. Learn more.
For Frequently Asked Questions (FAQs) on PPP Loan Forgiveness, check out this link. If you have additional questions, please contact your PPP loan lender.