SBA Will Again Start to Forgive PPP Loans
Payroll Protection Program (PPP) borrowers who submitted a request for loan forgiveness have been waiting for an answer after approvals seemed to shut down, perhaps due to a computer software glitch. But SBA says approvals should now come fairly quickly.
WASHINGTON – The U.S. Treasury Department announced that the U.S. Small Business Administration (SBA) will again start to process Payroll Protection Program (PPP) loan forgiveness applications after a delay that caught many recipients in a backlog.
According to CPA Practice Advisor, about 96,000 forgiveness applications have been submitted to SBA so far out of more than 5 million PPP loans issued. A Federal Computer Week (FCW) report suggests that the delay may have been caused by software glitches in the programs that handle PPP loans, which launched on Aug. 10.
Some banking groups, such as the Consumer Bankers Association, have asked Congress to forgive any PPP loan that’s less than $150,000, a move supported by Treasury Secretary Steven Mnuchin. However, Congress has not yet passed a law to do so.
PPP borrowers can have their loans forgiven if they meet the program’s requirements, which include using at least 60% of the funds for payroll costs. The rest of the money may be used in other eligible ways specified by the program, such as paying rent, utility bills and mortgage interest during the covered period.
The National Association of Realtors® (NAR) has posted a full list of forgivable expenses on its website.
To have loans forgiven, PPP borrowers must submit forgiveness applications directly to their SBA lender. The lender then submits them to the SBA for processing. NAR created a step-by-step video that offers detailed instructions on filling out a PPP EZ Forgiveness application form, which is posted on NAR’s website.
In general, SBA is expected to quickly approve loan forgiveness for any loan less than $2 million, and it says its backlog of forgiveness applications should be cleared in as little as two weeks.
PPP borrowers who request loan forgiveness must do so within 10 months from the end of their loan’s coverage period.
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