SBA Releases FAQs on PPP Loan Forgiveness Clarifiying Due Date Is NOT Oct. 31

By:
Chris Gaetano
Published Date:
Oct 15, 2020
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The Small Business Administration released several FAQs about the new simplified rules for Paycheck Protection Program loan forgiveness that, among other things, clarify that the due date for the application is not Oct. 31.

The SBA has apparently been receiving many inquiries regarding the due date. One question among the FAQs says, "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?" The SBA answered, "No."

The SBA explained, "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, and reflects the temporary expiration date for 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 FAQs also go over a number of other topics, such as the acceptability of scanned copies of signed applications and documentation (they are acceptable), whether gross or net cash compensation should be used in the calculation (gross), or whether group health care benefits count as a payroll cost (they do, provided the benefits are paid or incurred during the covered periods, though this does not include expenses for benefits paid by employees either pre- or post-tax).

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