When is the very last day I can apply for PPP Loan Forgiveness?

When is the very last day I can apply for PPP Loan Forgiveness?

We are asked a lot of questions regarding the Forgiveness timeline. We thought it would be helpful to provide you with an article that answers the question “What is the very last day I can apply for PPP Loan Forgiveness before I have to start making payments?

The SBA Rules make it a bit confusing because in the beginning of the program the rules stated you had an 8 week covered period to spend your funds. As the government realized businesses needed more time to spend the funds, they opened it up and adjusted the rules to an “8 week or 24 week covered period.”  That is where people tend to get a bit confused and start to worry.

Here’s a simple way of looking at it – you have 24 weeks, starting the day your funds were disbursed into to your bank account to spend PPP funds on eligible forgiveness expenditures. Keep the following in mind:

  • It doesn’t matter whether you spend the funds in 3 days or 24 weeks.  
  • When you apply for Forgiveness, all you need to show is that you spent your funds on eligible expenditures within the 24 week covered period. 
  • You can apply for Forgiveness as soon as you used all of your funds.

Here’s how to calculate the timeline if disbursement date was before July 16, 2020:

1. Start with the date your loan was disbursed into your bank account

  • For example funds were disbursed on May 10, 2020

2. Add 24 weeks 

  • May 10, 2020 + 24 weeks = October 24, 2020

3. Add 10 months

  • October 25, 2020 + 10 months = August 24, 2021

In this scenario, you would want to have completed your Forgiveness Application and have submitted it to your lender before August 24, 2021 to avoid making payments on your PPP loan. 

If your disbursement date was July 16, 2020 or later, the 24 week covered period is cut-off at December 31, 2020, so you may not have the full 24 weeks to spend your PPP funds. Also, this means that you must apply for Forgiveness by October 31, 2021.

After you submit your application for Forgiveness, lenders have up to 60 days to review your PPP Forgiveness application before submitting it to the SBA. Then the SBA has an additional 90 days to review. The SBA has been exceeding the 90 day review period on PPP Loan Forgiveness applications for PPP loans $2 million or more.