Be Patient When Planning Your PPP Loan Forgiveness Application

Kathie Gedde

July 24, 2020

As the Paycheck Protection Program winds down, we are turning our thoughts toward the process for getting those loans forgiven.  There are good reasons to relax and wait for now.

The AIPCA recently published an article listing factors that describe why it makes sense not to rush the forgiveness process.  They include:

1. Lenders aren’t processing PPP loan forgiveness applications yet.  In many cases, they’re developing portals that will make it easier to apply for forgiveness when the time comes.
2. Now that the covered period can be 24 weeks, borrowers have much more time to spend their loan funds, making forgiveness of the full loan amount easier than when the funds had to be spent in eight weeks.
3. Because payroll costs are a large component of loan forgiveness, it’s important to have correct, relevant payroll information when the time comes.  Many payroll providers are developing reporting that will conform to PPP guidelines, but those guidelines have not been finalized yet.
4. Loan payments don’t begin for 10 months, so there’s plenty of time to apply for forgiveness before those payments start.
5. The process for applying for forgiveness hasn’t been finalized yet, but it may be easier than previously anticipated if applications meet one of several requirements to file under certain safe harbor provisions.  As mentioned, we’re waiting for those final provisions.

 The article also suggests that while waiting, borrowers should start gathering needed documentation that will either be required to be submitted with the forgiveness application or to be kept in the borrower’s records relating to the disposition of the loan proceeds.  These include backup for amounts paid for non-payroll costs such as rent, utilities and mortgage interest.

You can find the full article here:  https://blog.aicpa.org/2020/07/5-reasons-borrowers-shouldnt-rush-their-ppp-forgiveness-applications.html?j=295041&sfmc_sub=111392702&l=2078_HTML&u=9578238&mid=7306387&jb=314&SubscriberID=111392702&Site=AICPA&LinkID=9578238&cid=email:NewsUpdate_A20JUL34:JUN20:patience+might+be+best+approach:AICPA&SendID=295041#sthash.76Q8jRcv.71MoLsXo.dpbs

It can be difficult to remain patient with the process, but there are indications that loan forgiveness may be simpler than previously thought.  Borrowers should wait for final guidance to maximize forgiveness amounts and make the process as smooth as possible.

Your advisor at SGA is happy to answer any questions – give us a call at 541-388-7888.

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