In mid-October, the U.S. Small Business Administration (SBA) released two (2) important updates for businesses that received Paycheck Protection Program (PPP) loans. The PPP provided 5.2 million loans worth $525 billion to American small businesses.
First, is October 31, 2020, the deadline for borrowers to apply for PPP loan forgiveness? No. Q&A No. 4 in the General Loan Forgiveness FAQs section, the SBA explains that borrowers may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from the loan’s origination, depending on the borrower’s agreement. But the SBA also reminds borrowers that loan payments are deferred only until 10 months after the last day of each borrower’s loan forgiveness covered period. There had been some confusion because the program’s loan forgiveness application forms (3508, 3508EZ, and 3508S) display an expiration date of “10/31/2020” in the upper-right corner.
Second, is there a new streamlined PPP forgiveness process for loans under $50,000? Yes. On October 8, the SBA released a simpler loan forgiveness application for small PPP borrowers with loans of $50,000 or less. SBA and Treasury have also eased the burden on PPP lenders, allowing lenders to process forgiveness applications more swiftly. SBA began approving PPP forgiveness applications and remitting forgiveness payments to PPP lenders for PPP borrowers on October 2, 2020.
Here is the simpler loan forgiveness application.