SBA gives clarification for confusion over PPP forgiveness application due date

by | Oct 19, 2020

Many small businesses and companies have been widely affected by the Coronavirus and the financial destruction that ithas caused. Congress created the Paycheck Protection Program as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to help ease this financial burden across the country. This legislation authorized the U.S. Treasury to use the Small Business Administration lending program to fund these loans. It was then announced that PPP borrowers could get the loans forgiven ifthe proceeds were used to pay certain eligible costs.

The Small Business Administration raised a red flag for many and caused a lot of confusion when PPP loan borrowers caught that there was an expiration date of “10/31/20” in the right-hand corner of multiple PPP loan forgiveness applications.

On October 13th, the SBA released an updated FAQ for borrowers and lenders to help them get a better understanding of the process. In this FAQ under question 4 is the clarification that many were looking to find:

4. Question: The PPP loan forgiveness application forms (3508, 3508EZ, and 3508S) display an expiration date of 10/31/20 in the upper-right corner. Is October 31, 2020 the deadline for borrowers to apply for forgiveness?

Answer: No. Borrowers may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from loan origination.

However, if a borrower does not apply for loan forgiveness within 10 months after the last day of the borrower’s loan forgiveness covered period, loan payments are no longer deferred, and the borrower must begin making payments on the loan. For example, a borrower whose covered period ends on October 30, 2020 until August 30, 2021 to apply for forgiveness before loan repayment begins.

The expiration date in the upper-right corner of the posted PPP loan forgiveness application forms is displayed for the purposes of SBA’s compliance with the Paperwork Reduction Act and reflects the temporary expiration date for approved use of the forms. This date will be extended, and when approved, the same forms with the new expiration date will be posted.

If you have any other questions or need further clarification, or need help with your PPP loan forgiveness, please don’t hesitate to contact us.

Business Travel Expenses: Per Diem vs Actual Expenses

May 9, 2023

If your employees travel for work purposes, it’s important to understand the various methods of tracking and substantiating travel expenses so that you can maintain accurate records, control costs, and take advantage of potential tax benefits. Watch this video to learn about business travel expenses, per diem allowances, and how they affect employees and employers.

6 Misconceptions of a Revocable Living Trust

May 8, 2023

A revocable living trust, or RLT, offers many benefits, including probate avoidance, privacy, and flexibility in managing assets during one’s life, incapacity, and death. However, despite their popularity as an estate planning tool, there are many misconceptions surrounding revocable trusts that lead to confusion and misunderstandings. Watch this video to learn about the top six misconceptions.

IRS Dirty Dozen Top Tax Scams To Avoid

Apr 7, 2023

Each year, the Internal Revenue Service publishes its annual Dirty Dozen list of tax scams highlighting various schemes that put taxpayers and their financial well-being at risk. In this video, we’ll provide an overview of five of the top scams on the list.