![]() On Jthe President signed the Paycheck Protection Program Flexibility Act, which changed some provisions, and on JTreasury released a new PPP Forgiveness Application and instructions. ![]() The PPP loan program is an SBA loan program under the SBA 7(a) program, and was created by the CARES Act that became law March 27, 2020.(This background may help if you see articles that don’t incorporate the latest changes, or if you are wondering why this round of forgiveness is a little different than before.) In this article, we provide both background information as well as details on specific questions related to the application when that information is available in official guidance.īefore we dive into details, let’s quickly review the Paycheck Protection Program (PPP) loan program. There is a lot to digest here and hopefully it will make sense once you approach it methodically. Let’s Go How Does SBA Loan Forgiveness Work? Improve your business credit history through tradeline reporting, know your borrowing power from your credit details, and access the best funding – only at Nav. You apply for forgiveness with the lender that gave you the loan, or the lender that is servicing the loan.Forgiven PPP loans are not taxed and the business may still deduct qualified expenses paid for with PPP funds.EIDL Advances (grants) are no longer deducted from the PPP loan forgiveness amount.There is no longer an “Alternative Covered Period.” This applies to any PPP loan for which a loan forgiveness payment had not been remitted by SBA as of December 27, 2020. The covered period is now any number of weeks between 8 – 24 weeks after the loan is disbursed.This article walks step-by-step through the full forgiveness form, 3508. For that reason, you may want to fill out either Form 3508EZ or Form 3508 to calculate forgiveness, and keep that documentation with your records. However, you must still calculate the amount of your loan that is eligible for forgiveness and maintain those records in case your application is audited. The latest and simplest form is 3508S and it may be used for loans of $150,000 or less. The rules and applications for applying for forgiveness have changed over time. There are currently three forgiveness forms: In essence, forgiveness turns the loan into a grant.To qualify for forgiveness requires you to spend your PPP loan funds properly in a specific period of time, and then apply for forgiveness with your lender for loans of more than $150,000 and directly with your lender or through the online SBA PPP Direct Forgiveness portal for loans of $150,000 or less. ![]() Updated Jto include the new SBA PPP Direct Forgiveness PortalThe main attraction of a Paycheck Protection (PPP) loan is that it may be fully forgiven.
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