PPP Loan Forgiveness Update – Still No Automatic Forgiveness
For the past few months, a bill has been pending in Congress that would automatically forgive PPP loans under $150,000. If this law is approved, small businesses who received a PPP loan of less than $150,000 can have their loan automatically forgiven without having to file a forgiveness application with their bank.
As of today, Congress still has not approved automatic forgiveness of PPP loans for small businesses.
Because the loan forgiveness application is lengthy, many small businesses are waiting to file their application in the hopes that Congress will approve automatic forgiveness. As of now, there is still plenty of time for you to wait and see if Congress acts.
The current deadline to apply for PPP forgiveness is 10 months after the end of your loan’s “covered period.” The covered period for your loan started the day you received the PPP loan and either lasts 8 weeks or 24 weeks, depending on the date you received your loan.
If you received your PPP loan before June 5, 2020, your loan’s covered period is either 8 weeks or 24 weeks, whichever you choose. If you received your PPP loan after June 5, 2020, your loan’s covered period is 24 weeks after the date you received your loan.
Your 10-month period to apply your loan forgiveness application starts after your loan’s covered period ends. For example, if you received your PPP loan on May 1st, you could choose either 8 weeks or 24 weeks to spend your loan. If you chose an 8-week covered period, you must have spent your entire PPP loan by June 26th and you have 10 months after that to apply for forgiveness. If you choose the 24-week covered period, you have until October 16th to spend your PPP loan, and then you have 10 months from that date to apply for forgiveness.
If you do not apply for forgiveness within 10 months of the end of your loan’s covered period, your PPP loan will become an actual loan that you will have to pay back with a 1% interest rate for a term of 2 years (if your loan was approved prior to June 5, 2020) or 5 years (if your loan was approved after June 5, 2020).
To apply for loan forgiveness, you will need to file the Small Business Administration’s application (Form 3508) with the bank that issued the loan to you. If your business did not reduce the number of its employees or their wages, you can use the more streamlined Form 3508EZ.
Both forgiveness applications as well as their instructions are available from our Coronavirus Resources for small businesses. FUBA members with questions about PPP loan forgiveness can ask our experts by calling us at 800-262-4483.
COVID-19 Updates Available On Our Website
Since the coronavirus pandemic began, FUBA’s staff of experts has been working to learn all we can to give our members accurate and current information. Our website has a dedicated Coronavirus Resources page that we update with new information constantly, and we have been sending weekly e-Alerts via email to our members with detailed, easy-to-understand guidance on the coronavirus.
Recent COVID-19 e-Alerts include:
Voluntary Payroll Tax “Cut” Optional for Businesses
How School Reopening Affects Paid Leave for Employees
Can an Employee Get More Than 2 Weeks of Paid Leave?
Should Businesses Screen Employees for Symptoms of COVID-19?
CDC Guidance for Employers with Suspected or Confirmed COVID Cases
And if you have a question about anything in our e-Alerts, call us at 800-262-4483 and one of our expert staff members will get back to you.
Emergency Bridge Loans Available For Businesses Impacted by Hurricane Sally
Florida businesses impacted by Hurricane Sally have until November 14, 2020 to apply for a Florida Small Business Emergency Bridge Loan. These are short-term, zero-interest working capital loans of up to $50,000. To be eligible, businesses must be in one of the following counties: Escambia, Okaloosa, and Santa Rosa. These loans are administered by the Florida Department of Economic Opportunity. For more information, or to apply for a bridge loan electronically, visit their website at floridajobs.org.
Newsletter Will Be Sent Via Email Only Starting January 1st
We are phasing out hard copies of this newsletter delivered through the US mail. Starting with the January newsletter, we will be sending it via email only, although hard copies will be available upon request. If you received a copy of this newsletter in your email inbox, you are signed up for emails from us and you do not need to do anything else to continue receiving our newsletter.
If you only receive the newsletter in the mail, you will need to make sure we have a valid email address on file for you or your business. Simply send us an email at firstname.lastname@example.org with the word “newsletter” in the subject line. Please include your company name and address so we can make sure to link your email to your company’s membership.