What is the deadline for PPP loan forgiveness 2021?

Asked by: Freida Beahan  |  Last update: February 9, 2022
Score: 4.9/5 (38 votes)

If you got a Paycheck Protection Program loan during the first draw, your deadline for applying for forgiveness is August 30, 2021. The applications for forgiveness are made through your lender or through the PPP Loan Forgiveness Portal opened by the Small Business Administration.

What is the deadline for second PPP loan forgiveness 2021?

Borrowers can apply for a Second Draw PPP Loan until March 31, 2021, through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, eligible non-bank lender, or Farm Credit System institution that is participating in PPP.

What is the deadline for the 2nd PPP loan forgiveness application?

For example, a borrower whose 24-week covered period ends on October 30, 2020 has until August 30, 2021 to apply for forgiveness before loan repayment begins.

Will 2021 PPP loans be forgiven?

Borrowers who received a PPP loan prior to the program closing on May 31, 2021 can now apply for forgiveness. The Small Business Administration's Paycheck Protection Program doled out $790.9 billion in small-business loans to struggling businesses between April 2020 and May 31, 2021, when the program closed.

What are the new rules for PPP loan forgiveness?

The “60/40 split” is still in effect: To receive maximum loan forgiveness, borrowers must spend at least 60% of their loan on eligible payroll costs, and no more than 40% on eligible non-payroll costs. SBA wrote in an interim final rule: “At least 60% of the PPP loan proceeds shall be used for payroll costs.

PPP Loan Forgiveness Deadline is September 2021

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When should I apply for PPP forgiveness?

Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.

Will PPP loan forgiveness be extended?

Borrowers are able to defer paying back principal and interest on their PPP loans during the deferment period which, prior to the new rule, ended after the SBA issued a decision on the borrower's loan forgiveness application. ... New loans under the Program are no longer being advanced as of May 31, 2021.

Can I use less than 24 weeks for PPP forgiveness?

A borrower may select a covered period between 8 weeks and 24 weeks, which commences upon disbursement of the PPP loan proceeds. The flexibility on the part of a borrower to choose a particular covered period within that range was a feature added pursuant to the Economic Aid Act.

Will 2nd draw PPP loans be forgiven?

Like the first round, second-draw PPP loans are entirely forgivable if the funds are used for approved expenses between the 8-and-24-week “covered period” and fund disbursement is properly documented. To obtain forgiveness, employee and compensation levels must also be maintained during the covered period.

Should I use 8 weeks or 24 weeks for my PPP loan covered period?

You may be able to wrap up the forgiveness process earlier. If you reduce your full-time employee count or employee wages after the 8-week period, that might reduce your eligible forgiveness amounts. However, a longer, 24-week covered period gives you more time to remedy any reductions in employee count or wages.

Can you get 2 PPP loans 2021?

You can't apply for a first-draw PPP loan AND a second-draw PPP loan at the same time, but if you act quickly, you can get your first draw funding and spend it in a legal fashion (i.e., on payroll expenses—which in the case of independent contractors, eligible self-employed individuals, or sole proprietors means paying ...

Can you use 12 weeks for PPP loan forgiveness?

Seasonal Employers: A seasonal employer that elects to use a 12-week period between May 1, 2019, and September 15, 2019, to calculate its maximum PPP loan amount must use the same 12-week period as the reference period for calculation of any reduction in the amount of loan forgiveness.

How long is the PPP forgiveness period?

Your loan forgiveness covered period generally begins on the date you received your PPP funds (or if you received them on more than one date, the first date you received PPP funds), and ends on a date selected by you between 8 to 24 weeks thereafter.

How long do you have to keep employees for PPP forgiveness?

Borrowers must retain their PPP documents for at least six years after the date the loan is forgiven or paid in full.

What happens if you miss the PPP forgiveness deadline?

WHAT HAPPENS IF YOU MISS THE APPLICATION DEADLINE. If you don't apply for loan forgiveness within 10 months after the last day of your covered period, you'll be required to start making payments to your PPP lender at 1 percent interest, which started accruing when the loan was made.

Why is PPP forgiveness taking so long?

PPP Loan Forgiveness Delays: The SBA and some PPP lenders are clashing over alleged delays in loan forgiveness. The agency says some lenders are too slow. By contrast, some lenders accuse the SBA of threats. Some PPP borrowers are caught in the middle of the finger pointing.

Do you have to wait 8 weeks to apply for second PPP?

When can you apply for the Second Draw? Eight weeks must pass from the time you get the First Draw PPP until the Second Draw PPP is disbursed to you. You can apply for the Second Draw before the 8 weeks has passed. However, if you do so, you want to make sure you don't accept the Second Draw money until after 8 weeks.

How long will PPP Round 2 last?

Unless Congress extends the program, PPP Round 2 applications will be accepted through May 31, 2021 or until the funds are exhausted. APPLY AS SOON AS YOU CAN.

Will there be a 3rd round of PPP funding?

There Won't Be Another PPP Loan in 2021, but Other Programs Can Help. The SBA (Small Business Administration) isn't planning another round of PPP (Paycheck Protection Program) loans. ... 2020, PPP loans were meant to provide needed relief to businesses faced with shutdowns during the pandemic.

Can I use 100% of my PPP loan for payroll?

60/40 Rule

However, as a self-employed worker, you can claim all 100% of your PPP loan as payroll under compensation replacement. Forgivable cash compensation is limited to $100,000 per employee on an annualized basis, which means you can use all $20,833 on your personal salary.

Can you go to jail for PPP loan?

Whether a PPP loan fraud case involves thousands, hundreds of thousands, or millions, defendants can receive prison sentences in these cases. If there is evidence of fraud, people can go to jail for a $20,000 PPP loan, just like someone whose PPP loan was $100,000 or $1 million.

Are PPP loans under 150 000 forgiven?

Small Business Administration: PPP loan borrowers under $150K get forgiveness through new portal. The Small Business Administration has created an online portal that allows for direct loan forgiveness for borrowers of up to $150,000. ... “The vast majority of businesses waiting for forgiveness have loans under $150,000.

Is PPP forgiveness taxable?

For California purposes, forgiven PPP loans are excluded from gross income.

Will there be a PPP in 2022?

Although it's unlikely the SBA will issue PPP loans in 2022, the agency does offer other alternatives for businesses to acquire funding. Let's have a look at a few. Microloans, which offer funding of $50,000 or less to help with start-up costs or allow a business to expand.

Will Congress approve more money for PPP?


Congress approved an extension of the PPP loan program until June 30, 2021, including “second draw” PPP loans for businesses that received PPP funding in 2020. ... In late December 2020, Congress passed a bill approving a re-funding of the PPP and EIDL programs under the CARES Act.