The U.S. Small Business Administration (SBA) has added more guidance to the Paycheck Protection Program (PPP) General Loan Forgiveness FAQs. This new FAQ guidance clarifies when PPP loan forgiveness applications are due.
The guidance provides that PPP borrowers may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from date of loan origination.
Keep in mind that loan payments commence 10 months after the borrower’s covered period ends. To avoid making loan payments on potentially forgivable amounts, you must submit the loan forgiveness application within that 10-month period.
In the FAQ, the SBA also addressed the October 31, 2020 expiration date on the loan forgiveness applications (Form 3508, 3508EZ, 3508S). It explained this date merely represents a temporary expiration date in compliance with the Paperwork Reduction Act and not the deadline for the forms to be submitted.
If you have any questions about this new guidance or calculating your 10-month payment deferral period, please contact your Grassi advisor.