PPP Update: When Can I Apply for Forgiveness?

Blog
July 27, 2020

While Paycheck Protection Program (PPP) borrowers can submit their forgiveness application (Form 3508 or Form 3508EZ) any time before the maturity date of the loan, most will submit relatively soon after the end of their chosen forgiveness covered period. Further, if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness, the forgiveness application can be submitted prior to the end of the forgiveness covered period. With each passing week more and more PPP borrowers have used all of their loan proceeds.

The Treasury and Small Business Administration (SBA) have been quiet in recent weeks. We have not seen any new guidance in about a month and there are still some unanswered questions. For example, there is currently no definitive guidance on how the FTE reduction works if you are using a 24-week forgiveness covered period and intend to apply for forgiveness before the 24-week period ends. We are also hearing that there may be changes to the forgiveness process with new legislation.

The American Institute of Certified Public Accountants (AICPA) recently posted a blog, listing five reasons as to why you may not want to rush to complete your PPP loan application. Most banks are not accepting applications yet and new legislation could lead to changes to the applications and application process.

That said, on July 23, 2020, the SBA released a procedural notice providing guidance to SBA employees and PPP lenders on loan forgiveness.  The notice explains that the SBA has created a PPP Forgiveness Platform that is available only to PPP lenders, not PPP borrowers. Lenders will use the platform to upload require documentation and monitor the status of the SBA response. According the notice, “The PPP Forgiveness Platform will go live and begin accepting Lender submissions on August 10, 2020, subject to extension if any new legislative amendments to the forgiveness process necessitate changes to the system.”

For additional guidance and resources on PPP loans, visit our COVID-19 Resources Hub or contact our COVID-19 Advisory Team at 240.364.2580.