Clarification on PPP Forgiveness Application Deadline
The SBA has issued additional guidance on the Paycheck Protection Program (PPP). The new FAQ clarifies when loan forgiveness applications are due.
Question: The PPP loan forgiveness application forms (3508, 3508EZ, and 3508S) display an expiration date of 10/31/2020 in the upper-right corner. Is October 31, 2020, the deadline for borrowers to apply for forgiveness?
Answer: No. Borrowers may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from loan origination.
However, if a borrower does not apply for loan forgiveness within 10 months after the last day of the borrower’s loan forgiveness covered period, loan payments are no longer deferred, and the borrower must begin making payments on the loan. For example, a borrower whose covered period ends on October 30, 2020, has until August 30, 2021, to apply for forgiveness before loan repayment begins.
The expiration date in the upper-right corner of the posted PPP loan forgiveness application forms is displayed for purposes of SBA’s compliance with the Paperwork Reduction Act. It reflects the temporary expiration date for the approved use of the forms. This date will be extended, and when approved, the same forms with the new expiration date will be posted.
The full list of General Loan Forgiveness FAQs can be found here.
Brown Smith Wallace PPP Loan Resources
Our CARES Act Loan Consulting team can help organizations proactively work with their lenders by applying and understanding the requirements for loan forgiveness.