PPP Loan Forgiveness Application & Instructions Released

May 18, 2020

The Small Business Administration (SBA) released the Paycheck Protection Program (PPP) Loan Forgiveness Application on May 15, 2020. The SBA also issued detailed instructions for borrowers on how to fill out the application. The Loan Forgiveness Application is for use by borrowers applying for loan forgiveness of their PPP Loans obtained under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The lender must issue a decision to the borrower within sixty days of receiving the application. If any portion of the PPP loan is not eligible for forgiveness, but was used on eligible costs, then the portion of the loan not forgiven needs to be paid back within two years. The interest rate is 1%, and loan payments are deferred for the first six months.

Although there is no specific deadline to apply for forgiveness, borrowers will want to apply for loan forgiveness prior to the expiration of the first six month period to avoid making payments on those amounts.

More information about how the CARES Act provides assistance to small businesses can be found at the U.S. Department of The Treasury website at: https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses. Borrowers should revisit the Treasury website regularly as the SBA often posts updates as to the PPP Loan.