In key webinar takeaways, experts walk you through how to get lenders to approve your PPP loan forgiveness applications.
Lenders, not the SBA, are responsible for approving applications for PPP loan forgiveness, so it’s important that you and your lender work together to ensure application forms and documentation are accurate and complete. The Payroll Protection Program, part of the CARES Act legislated last year to help businesses get through the COVID-19 pandemic, pumped $81 billion into the restaurant and hospitality industry in loans during 2020 and 2021. Making those first- and second-round PPP loans forgivable was essential in making sure that restaurants aren’t burdened by more long-term debt.
Bill Briggs, an independent consultant and former Small Business Administration official, and Aaron Frazier, the Association’s Director of Health Care and Tax Policy, moderated a webinar on May 25 that helps explain how you can qualify and apply for PPP loan forgiveness.
The program, Briggs explains, was designed to help businesses stay open during the pandemic and keep people employed. And Congress legislated more changes in subsequent bills to make more expenses forgivable and the loan forgiveness process more streamlined. The process, he says, really starts with you and your lender.
Lenders, not the SBA, are responsible for approving applications for PPP loan forgiveness, so it’s important that you and your lender work together to ensure application forms and documentation are accurate and complete. Here’s how it works:
Loan Forgiveness Requirements
Both 1st- and 2nd-round PPP loans qualify for full loan forgiveness during the 8- to 24-week covered period if:
Two separate safe harbor rules exempt certain borrowers from having their loan forgiveness amount reduced based on a reduction in FTE employee levels.
You can apply for loan forgiveness once you’ve used all the proceeds you received, and you have until the maturity date of the loan to apply. If you don’t apply within 10 months after your covered period ends, however, your loan repayment will no longer be deferred and you’ll have to start making loan payments to your lender.
To apply, here’s what you need:
And give the process time. Briggs says lenders have 60 days from the time you submit your application for forgiveness to reach a decision on how much of your PPP loan can be forgiven. The SBA has an additional 90 days to process and review the lender’s decision and repay the lender.
You might have questions along the way, as did some of the webinar attendees. Examples include: