Time to Apply for PPP Forgiveness; Forms 3509/3510 Updates

by Adam Sweet, J.D., LL.M.

The Paycheck Protection Program (PPP) has wrapped up (or will soon wrap up) for many borrowers. Still, there are several important updates some PPP borrowers should take note of. 

New Paycheck Protection Program Streamlining Guidance for Loans of up $150,000

In recently released guidance, the government is making two changes to the PPP forgiveness process for PPP loans of $150,000 and under.

First, second draw PPP borrowers with loans of $150,000 or less can use an optional method (called the “COVID Revenue Reduction Score”) to demonstrate the requisite 25% revenue reduction. This score is developed by a third-party governmental contractor “based on a variety of inputs including industry, geography, and business size.” Second, lenders can choose to use a direct borrower forgiveness process for all PPP loans up to $150,000 instead of lenders processing the applications themselves. The government states it will be issuing further detailed procedural guidance for both the COVID Revenue Reduction Score and the direct borrower forgiveness process.

This new guidance also provides “that a timely appeal by a PPP borrower of a final SBA loan review decision extends the deferment period of the PPP loan” until the government’s decision becomes final.

10-month Date for Applying for Paycheck Protection Forgiveness

Previous guidance states a PPP borrower has up to “10 months after the end of the borrower’s loan forgiveness period” to apply for forgiveness while deferring interest and principal payments. Of course, a borrower can still apply for forgiveness after this 10-month window has expired, but the borrower would begin making principal and interest payments. 

Read the entire article at EideBailly: https://www.eidebailly.com/insights/articles/2021/7/time-to-apply-for-ppp-forgiveness-forms-3509-3510-updates