STATEN ISLAND, NY – Companies that took advantage of the US Small Business Administration (SBA) Salary Protection Program in 2020 must apply for a pardon shortly or they will be responsible for paying off their loan.
The Payroll Protection Program (PPP), designed to provide financial assistance to small businesses affected by the coronavirus (COVID-19) pandemic, provided loans to 5.2 million businesses in 2020.
These loans are eligible for full loan forgiveness if businesses met certain criteria during the coverage period for which they could spend the money.
Companies seeking loan forgiveness had to maintain employment and compensation levels, and spend the loan on payroll and other eligible expenses, with at least 60% of loan proceeds going to the company’s payroll.
Loan recipients have up to 10 months from the end of the coverage period to apply for a loan forgiveness before they become responsible for payments and interest.
For some of the early applicants for the program, there was an eight-week coverage period in April 2020, which means the loan forgiveness application deadline will drop sometime in mid-July.
Later, the claimants acted for a 24-week coverage period, meaning that the deadline could have been as early as September.
To apply for forgiveness, businesses should contact their lender and complete either Form SBA 3508, Form SBA 3508EZ, or Form 3508S SBA.
Further, businesses should draw up all documentation on wages and other expenses during the loan coverage period, provide together with the request for forgiveness form.
Submit the forgiveness form and required documentation to your PPP lender and stay in touch throughout the process to ensure that your loan has been fully forgiven.
“If the SBA reviews your loan, your lender will notify you of the review and the SBA’s decision to review the loan. You have the right to appeal certain SBA loan review decisions. Your creditor is responsible for notifying you of the amount of forgiveness paid to the SBA and the date your first payment is due, if applicable, ”according to the SBA.