What’s the deadline for applying for PPP loan forgiveness 2022? If you are reading this post at the moment, you are certainly looking for some good information on the PPP loan forgiveness deadline. In this post, I will provide you with good clarity on PPP loan forgiveness. After reading this post till the end, you will be certainly out of all your confusions relating to PPP loans. Most importantly, you should be able to go about the PPP loan forgiveness confidently without making any mistakes.
PPP loan or Paycheck Protection Program loan was an initiative by SBA to help small businesses in keeping their workforce intact during the COVID-19 pandemic times. The program provided small businesses with funds for paying 8 weeks of payroll costs including other employee benefits. Besides, funds were also given to businesses for paying interest on rent, mortgages, and utilities. However, the program ended on May 31, 2021.
The best part is these loans don’t need to be repaid, and borrowers had the option to apply for forgiveness. They only have to pay if they don’t apply for a loan forgiveness. As of April 24, 2022, SBA has forgiven around 96% of the PPP loans sanctioned in 2020, and 81% of the PPP loans sanctioned in 2021.
If you are an existing borrower, you can still apply for the PPP loan forgiveness. The process is conducted in two phases: The First Draw PPP loan, and the Second Draw PPP loan. The application form is available for download on the SBA website.
As far as qualification criteria goes, a borrower needs to ensure that one has maintained the employee, and compensation levels. One must at least spend 60% of the proceeds on payroll costs. Besides, one will need to compile essential documentation as required by SBA, which includes Payroll, and Non-Payroll documents.
Payroll documents include bank account statements of cash compensation paid to employees, tax forms, payment receipts, canceled checks relating to employee health insurance, and retirement plans. Non-payroll documents include documents for business mortgage interest payments, utility payments, property damage costs, supplier cost, and work protection expenditures.
As already pointed out that PPP loans don’t need to be repaid, borrowers can apply for loan forgiveness. However, there is a deadline for the PPP loan forgiveness application. According to SBA, borrowers must apply for the loan forgiveness within 10 months after the last day of the covered period, and if one fails to do so, one will have to repay the amount.
According to an SBA spokesperson, around a total of 1,680,000 loans have been approved so far.
PPP loan has been an excellent initiative to help the small businesses sustain during the COVID-19 times. Even though the PPP loan has ended in 2021, borrowers can still apply for the PPP loan forgiveness. However, if you are planning to apply for a loan forgiveness, you will have to ensure that you are applying within 10 months after the last day of the covered period. Failing to do so means you won’t qualify for the loan forgiveness, and you will need to repay the loan.
I have explained how you can go about the PPP loan forgiveness. Before going ahead with the loan application, you must get all the essential documents ready. Once you do this, you are good to go with submitting your loan application.
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