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PPP loan forgiveness? Don’t rush in

On Aug. 10, the U.S. Small Business Administration opened its loan forgiveness portal in the wake of a contested battle about future legislation for COVID-19 relief.

There are several reasons why business owners may not want to rush into completing the PPP loan forgiveness paperwork:

  • Streamlined forgiveness: The Health, Economic Assistance, Liability Protection and Schools Act (HEALS Act), the Senate proposal for the follow-up to the CARES Act, includes a streamlined process for borrowers with loans less than $2 million and an even more streamlined process for loans less than $150,000. This could reduce the time, effort and expense to complete the application for small business owners.
  • More costs may be forgivable: The HEALS Act proposes expanding the allowable expenses that could be forgiven to include cloud software, operational expenses for human resources and accounting needs, property damage due to public disturbances, supplier expenditures, and the costs for personal protection equipment as well as investments to facilitate compliance with CDC guidelines. Note, the requirement that at least 60% of the forgiven amount be for payroll expenses would still apply.
  • New technology: The SBA has developed an entirely new technology portal to facilitate forgiveness. Even the best technology solutions have issues at launch and borrowers may prefer to give the SBA and lenders more time to identify process improvements.
  • Lenders aren’t ready: Although the SBA portal is now open, many lenders are waiting to accept and submit PPP loan forgiveness applications until there is more clarity about pending legislation.
  • There’s plenty of time to apply: Borrowers can submit applications up to 10 months after their covered period ends, which is 8 or 24 weeks after they received their loan proceeds
  • Interest only applies to amounts that aren’t forgiven: For borrowers that may be adverse to debt and paying interest, the SBA has indicated in its August 4 FAQ on Loan Forgiveness that payments and interest aren’t due until after a decision about loan forgiveness is made and that there will be no interest charged on forgiven amounts.


There’s a lot up in the air right now that could make the forgiveness process significantly simpler and cheaper. If your loan is less than $2,000,000, and especially if it’s less than $150,000, unless there is a compelling reason otherwise, we believe it may be best to wait, for now.  This position mirrors the advice of the AICPA and other experts.

Stay tuned as we will update you both by e-alerts and webinars as information on the next round of Stimulus and PPP changes become available. Our next webinar on PPP Loan Forgiveness will be held Thursday, August 27, 2020 from, 3:00-4:15 p.m. REGISTER.  In the meantime, please contact us with your questions and concerns at 847-267-9600 or info@waradydavis.com.

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.


* SBA advises that borrowers and lenders may rely on the FAQs on PPP Loan Forgiveness as SBA’s interpretation, in consultation with Treasury, of the CARES Act, the Paycheck Protection Program Flexibility Act, and the interim final rules relating to the PPP (the “PPP Interim Final Rules”).


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