Denver Metro Chamber of Commerce issued the following announcement on Oct. 19.
We have good news: Halloween won’t be as scary as originally thought for the millions of small businesses that took out Paycheck Protection Program (PPP) loans of $50,000 or less. The U.S. Small Business Administration (SBA) has confirmed that the deadline for PPP loan forgiveness applications is not Oct. 31 as originally expected and will instead depend on loan maturity dates.
Through clarification on the SBA’s website, the agency states that the deadline for submitting a loan forgiveness application is the maturity date for the loan, which may be either two or five years from the loan origination date as specified by the terms of the loan agreement. This means businesses have more time to apply for forgiveness with their lenders.
That doesn’t mean borrowers don’t have to pay during the two-year or five-year term though. According to our Denver Metro Small Business Development Center (SBDC), here are some things for PPP recipients to consider:
- Borrowers have until the final maturity date to request forgiveness; they will be required to begin payments on the loan within 10 months of the last day of the covered loan forgiveness period.
- During that interim 10-month period and while a business waits for acceptance of the application for forgiveness, businesses will not have to make payments on the loan.
- Businesses can still apply for forgiveness after the grace period and until the final term of the loan.
- Businesses that still have an open loan extending beyond the grace period should expect to make monthly loan payments until the loan is closed or forgiveness has been confirmed by their lenders.
PPP Loan Origination Date: June 25, 2020
24-Week Covered Period Ends: Dec. 10, 2020
10-Month Grace Period Ends: Oct. 10, 2021
Payments Initiated: Nov. 1, 2021
Loan Term: 60 Months (from Origination)
Loan Maturity Date/Forgiveness Deadline: June 25, 2025
Original source can be found here.
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