PPP Loan Forgiveness Deadlines – When Is The Last Day To Apply for PPP Loan Forgiveness?
To know the PPP loan forgiveness deadlines you also need to know when is the last day to apply for PPP loan forgiveness? The correct question you should be asking yourself is, “When is the last day to apply for PPP loan forgiveness without having to start paying the loan to the bank? In this video we are going to show you how to determine the PPP loan forgiveness due date.
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One of the most common questions that we get here at FreedomTax Accounting is, when is the last day to apply for my PPP loan forgiveness? The answer to that question technically is 5 years, but the correct question that you should be asking yourself is, when is the last day to apply for my PPP loan forgiveness before I need to start making payments towards the back? That’s what we’re going to talk about in this video.
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We are recording this video on November 23rd, 2021. We always emphasize the date of the recording on any video relating to the PPP program because this loan program has been constantly changing, 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 loans.
Now, a lot of business owners have received their PPP loan in 2020 and 2021, but they still haven’t applied for their PPP loan forgiveness.
When is the last day to apply for the PPP loan forgiveness?
The SBA rules say you have until the end of the maturity date of the loan, what does that mean? Remember that the PPP loan is not a loan from the SBA, it’s an SBA backed up loan, meaning that a bank gave you a loan and if you don’t apply for forgiveness, then you have a loan with that back; so, once you apply for forgiveness and is forgiven, the SBA is going to pay the loan for you, that’s how is forgiven. Now if you don’t apply for forgiveness, basically you have to start making payments towards the loan, and it’s a five-year loan at 1% interest, so you have 5 years to pay that loan back. At the end of those 5 years you can technically apply for PPP forgiveness, you have until the end of the maturity date, and if you wait that long what’s going to happen is that you apply for PPP forgiveness and if it gets forgiven, the bank is supposed to pay you back all those payments that you have made; but you don’t want to do that, you don’t want to start making payments towards the back, so there is a specific date which is the last day to apply for PPP loan forgiveness before you need to start making payments towards the back, what is that date? It is 10 months after your covered period.
How do you get that date?
So, go to your bank account and check what is the date the PPP loan funds got to your bank account, so the day that the PPP funds were deposited into your bank account. From that date you count your 24 weeks covered period, and then from after the 24 week covered period, you add 10 months; so, once again, the date you got your PPP funds deposited in your bank account, from that date you count 24 weeks, which is your covered period, and from there add ten additional months; that’s the last day that you can apply for PPP loan forgiveness without having to make payments towards the back.
Once you submit your PPP loan forgiveness application to the bank, the bank cannot make you make payments until they have the SBA decision on if your loan is forgiven or not.
Once again, the date you got the funds, you have a 24-week covered period, and then you add 10 weeks. That is the last day to apply for PPP loan forgiveness without having to pay the bank the loan.
So now you know. I hope you have received valuable information from this video, if you have like it and share it with other business owners that can take advantage of this information. Remember that we are praying for you, for your family, and for your businesses.
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