How Much Time Does PPP Forgiveness Take? | How Long is PPP Forgiveness Process?
The PPP loan forgiveness process may take a long time and small business owners that received the PPP loan have to know what to expect from their bank and the SBA when applying for PPP forgiveness.
This video is intended for educational purposes and should not be taken as legal or tax advice. You should consult with your financial professionals about your unique financial situation before acting on anything discussed in these videos. Freedomtax Accounting and Multiservices Inc. is providing educational content to help small business owners become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience. Freedomtax Accounting and Multiservices Inc. or its members cannot be held liable for any use or misuse of this content.
How long does PPP forgiveness take? That’s what we are going to discuss in this video. Hello from Freedom Tax Accounting or an accounting firm where we have been providing quality tax and accounting services now for over 20 years. This video is being recorded on June 15, 2021, and we always emphasize the date on the recording on any video relating to the PPP program because the PPP has been constantly changing. So, there may be things we discussed in this video that can change as soon as tomorrow so that’s the importance of subscribing to our channel that way you’re always up to date with the most current and correct information relating to these SBA loan programs.
Now one of the most common questions we get here in our office is how long does the PPP forgiveness process take, how long will it last? Now in order to answer this question, there are two things we need to consider: The first one is how much time do I have to apply for forgiveness with the bank, and number two, “How much time will the PPP forgiveness process take once I already applied for forgiveness with the bank?” So, we’re going to discuss those two topics in this video.
So, the first one is how much time do I have to apply for forgiveness once I get the PPP loan funds deposited into my bank account. Now the first thing you need to know is that the PPP forgiveness process is with the bank that gave you the funds it is not via the SBA, so the first thing you need to do is find out what bank gave you the PPP loan funds all right. Now, how much time do you have to apply for forgiveness with the bank? You have a lot of time. You have almost 16 months, but if you want to know the exact amount of time you have basically, find out the exact date that your PPP funds were deposited into your bank account okay. Once you have that date, from that date count 24 weeks. So, from the date you got the funds in the bank you count 24 weeks forward, and then after you have that 24-week date you have an additional 10 months after the 24-week covered period to apply for PPP forgiveness with the bank before the bank tells you that you have to start making your monthly payments on your PPP loan. So, now you know how much time you have. From the time you get the funds you have almost 16 months to apply for forgiveness with the bank until the bank starts telling you, you have to start making your monthly payment.
Now once you have applied for forgiveness with the bank how much time will that process take? So, the SBA has made rules on how much time the banks can take to process your PPP forgiveness loan application okay. So, once you send your PPP loan forgiveness to the bank, that bank has 60 days to process your PPP loan application and to send it to the SBA to get the forgiveness process approved by the SBA. So, once again once you have submitted your PPP on application to the bank that bank has 60 days to process your PPP loan forgiveness and send it to the SBA. Now once that bank sends your PPP loan application for forgiveness to the SBA, the SBA can take up to 90 days after they received the PPP forgiveness application from your back to finally approve your forgiveness or not. So, once again once you file forgiveness with the bank has up to 60 days then they have 60 days to send it to the SBA, and the SBA has an additional 90 days. So, basically, once you send your PPP forgiveness application to the bank, the process can take up to five months okay so you need to be patient. So, this is going to be a very long process okay. So, once the SBA has an additional 90 days to process your PPP, they give their answer to the bank and the bank will tell you how much PPP has been forgiven for your PPP forgiveness application okay.
So, now you know how much time it takes to apply for PPP loan forgiveness okay.
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