Where Would Your Business Be Without the PPP?

Since its enactment, the PPP has been a necessary lifeline for many businesses. By providing emergent cash flow, the PPP allowed businesses to retain their workforce and ultimately keep their heads above water amidst the COVID-19 pandemic. Now that the PPP has ended, however, businesses are left wondering how to stay afloat. For businesses that received PPP loans, a crucial consideration is loan forgiveness eligibility.

Failing to receive loan forgiveness may be a substantial hardship for business who are still facing setbacks amidst the surging COVID-19 rates. Without loan forgiveness, PPP borrowers will be required to repay the amount borrowed at a 1% interest rate in a relatively short amount of time. Although PPP borrowers who received their loan after June 5, 2020, have five years to repay the loan, PPP borrowers who received their loan prior to this date only have two years to pay it back after the deferment period ends.

Even if you are ultimately deemed ineligible, applying for loan forgiveness is a crucial step for PPP borrowers. Failing to apply for loan forgiveness will result in the deferment period ending only 10 months after the end of your selected covered period. In comparison, applying for loan forgiveness will result in your loan payments being deferred until the SBA either remits your forgiveness amount or deems it ineligible for forgiveness. Therefore, applying for loan forgiveness may serve to lessen the sting of repayment by extending the deferment period and ultimately pushing back the start date of the repayment period.

Determining your application deadline is critical. The deadline by which an application must be filed varies based on the loan date and the chosen coverage period. Although deadlines for early PPP borrowers have come and gone, deadlines for many others still lurk on the horizon. As the new year approaches, PPP borrowers must either act soon or face the harsh realities of loan repayment. Even so, the program’s apparent complexity is leaving many business owners feeling paralyzed by uncertainty

Our team understands that sorting through the unknown can be a time-consuming and overwhelming process, especially when fighting through it alone. Whether you are struggling with where to start, which forms apply to you, or what records you’ll need, we are here to help. Our goal is to help borrowers maximize the benefits of the PPP by receiving loan forgiveness and removing this obligation from their books once and for all.