We are awaiting Congress to pass a new stimulus bill. In the original bill, it appeared that all PPP loans up to $150,000 (and potentially up to $250,000) would be “automatically forgiven.” This meant filing only a confirmation of use/need. As we are still waiting for final guidance, some lenders are telling those with PPP loans of $150,000 or less continue to wait it out. There is no hurry to apply for forgiveness as they are hoping the government will pass legislation that will simplify the forgiveness process for these loans.
At this time, if your PPP loan is greater than $150,000 you should reach out to your bank to see if you should submit the forgiveness application. Most companies will be able to use the EZ application. The instructions for the SBA version of the EZ application may be found at: https://www.sba.gov/document/sba-form-paycheck-protection-program-ez-loan-forgiveness-application-instructions-borrowers.
Before you begin, please review these instructions and questions to determine if you are eligible for The EZ application. Also verify with your lender as they may have their own version of the forgiveness application that you will need to complete.
Below is some helpful information regarding the PPP:
EIDL Advance and PPP Interaction
The EIDL Advance reduces the actual forgiveness you will receive. Some lenders reduced the loan amount by the EIDL Advance amount the borrower received so please verify this before completing the forgiveness application.
What happens with any remaining PPP amount after forgiveness?
The remaining balance of your PPP is now a loan with interest at 1.0%. Your loan term from disbursement may be either two years or five years, or, you can repay the balance right away.
No matter your application outcome, be advised of the records retention rules. You will need to save everything in case of an audit.
As we navigate through these times of uncertainty and adjust to our new normal, we here are at The Foresight Companies want to be your source for all topics related to your business operations. Please visit our COVID-19 Business Operations Resource Center frequently for updates.
*Please note that as information is updated and modified, terms and conditions are subject to change.