On October 13, the U.S. Small Business Administration (SBA) released clarifying guidance regarding the due date of forgiveness applications for loans issued via the Paycheck Protection Program (PPP). A recent article from the Journal of Accountancy offers an overview of the controversy surrounding the issue.
Many borrowers were surprised to find that the PPP loan forgiveness application forms listed “10/31/2020” as an expiration date. This elicited fears that any applications for PPP loan forgiveness were due by the end of October 2020.
The SBA updated its PPP forgiveness FAQ page to clarify that loan forgiveness applications for the PPP are not due by the expiration date listed on the forms. Rather, as previously announced, a loan recipient’s forgiveness application is due any time prior to the maturity date of their loan. Although the forgiveness application is due any time prior to the maturity date, the loan payment deferral ends 10 months after the end of the covered period, so the forgiveness application should be submitted within that timeframe to avoid having to start making payments.
The expiration date listed on the loan forgiveness applications forms was included in order for the forms to comply with the requirements of the Paperwork Reduction Act. “The date represents the temporary expiration date for approved use of the forms, the SBA said, adding that once a new expiration date is approved, it will be posted on the forms,” clarifies the author.
For further details, click here to read the article in full at the Journal of Accountancy.