October 13, 2020; Journal of Accountancy
Writing for the Journal of Accountancy, Jeff Drew advises that the US Small Business Administration (SBA) does not intend to scare the multitudes with a demand for PPP forgiveness applications by Halloween.
The terror was inspired by the expiration date of October 31st displayed on the agency’s loan forgiveness applications. But on Tuesday, it added the following to its forgiveness frequently asked questions document in answer to the query, “Is October 31, 2020, the deadline for borrowers to apply for forgiveness?”
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 has 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 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.
But to ensure you do not get frightened later, you might want to confirm the real date by which the application will be required and arrange to get it in with plenty of time.—Ruth McCambridge