New PPP Forgiveness Application for Loans Under $50K
The Small Business Administration has released a new simplified PPP forgiveness form this week. Companies that borrowed $50,000 or less can now complete a one-page form that skips some calculations that made earlier PPP forgiveness applications more complicated.
Processing the New Simplified PPP Form
The SBA began processing loan forgiveness applications on October 2, 2020. The streamlined application is also making life easier for lenders. Banks issuing the PPP loans are able to process the simplified PPP forgiveness form much more quickly.
Lenders issued some 3.5 million loans (68 percent of the total) that were for $50,000 or less. Those SBA-underwritten loans added up to $62 trillion, but made up only 12 percent of the total PPP funds loaned out.
Some Still Say Wait to Apply
Some bankers and accountants advise to wait a while longer yet before applying despite the simplified PPP forgiveness form. Congress has signaled the next Covid-19 relief bill might raise the limit for streamlined forgiveness to $150,000, and some legislators are pushing for waiving repayment of these smaller loans with no form whatsoever. There is also a chance of Congress authorizing further PPP funds.
The SBA says borrowers can submit a loan forgiveness application any time before the maturity date of the loan. The maturity date is either two or five years from when the funds were depositing, depending on the borrower’s agreement. But loan payments are deferred only until 10 months after the last day of each borrower’s loan forgiveness-covered period.
This is the SBA’s announcement of the simplified forgiveness process.
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