Don’t Rush PPP Forgiveness: More Changes are Coming
Although forgiveness for Paycheck Protection Program (PPP) loans is front of mind for borrowers, experts say not to rush to apply for forgiveness.
More Changes Coming
Frequently Asked Questions (FAQs) expected to clarify many remaining PPP loan forgiveness related issues are still awaited from the SBA and Treasury. The 25 to 30 FAQs are not expected to be released before new stimulus legislation is passed by Congress and signed into law. Congress is racing to put together a package before going on recess August 8th.
One reason for the guidance delay is that Congress is debating a new round of COVID-19 relief, which is expected to include a second PPP initiative more targeted than the first one. Those discussions also may include major changes relaxing the forgiveness requirements for the smallest PPP loans, possibly those up to $100,000 or $150,000.
SBA is Not Accepting Loan Forgiveness Applications Yet
Last week the SBA issued a procedural notice that indicated it would not begin accepting PPP forgiveness submissions from lenders until a new software-as-a-service platform currently under development goes live August 10th. The SBA said the launch could be delayed if new legislation changes the forgiveness process in ways that require changes to the new platform.
Borrowers Have Time
The most important date in the PPP forgiveness process doesn’t come until 10 months after the end of the loan’s forgiveness covered period when principal and interest payments begin. At that point, if forgiveness forms have not been submitted, the funds officially become a loan that needs to be repaid. The actual deadline, however, for borrowers to apply for forgiveness is loan maturity (2 or 5 years from date of loan inception.)
The AICPA and others recommend borrowers take their time and make sure they have as much information as possible so they can maximize loan forgiveness.
AICPA Releases New, Free PPP Loan Forgiveness Tool
A new, free tool developed by the AICPA and fintech lender Biz2Credit is designed to help borrowers and their CPA advisers complete the forgiveness application for Paycheck Protection Program (PPP) loans.
Available at PPPForgivenessTool.com, the dynamic platform automates the forgiveness process for small business owners who received funds from the PPP. The tool incorporates the PPP forgiveness calculator developed by the AICPA and is available to any business approved for a PPP loan, regardless of the lender it worked with to receive funding.
We Are Here to Help
When the SBA & Treasury release their PPP loan forgiveness FAQs and new stimulus legislation becomes law, we will provide e-alerts and webinars including a PPP loan forgiveness update.
In the meantime, please contact us with your questions or concerns at 847-267-9600 or firstname.lastname@example.org. You can also visit the Warady & Davis LLP COVID-19 Resource Center for a wealth of information on stimulus assistance, new legislation and much more. This information is updated regularly. This is a rapidly evolving situation so please do not hesitate to reach out to us; we are here to help.