With the Paycheck Protection Program (PPP) Loans ending earlier this year on May 31, the time has come to apply for loan forgiveness for many small businesses. The U.S. Small Business Administration (SBA) recently announced the opening of a new portal that will streamline the process of helping over 11 million small business owners in a quick and efficient way. Did your small business receive a PPP loan in 2020-2021? See if you have the opportunity to have your loan forgiven using the new portal!
What do I need to have my loan forgiven?
To have your loan forgiven you need to meet a few requirements. The first requirement is that you must have borrowed $150,000 or less to apply for forgiveness. If you received more than this amount you are automatically excluded from using the portal. The earliest you can apply for loan forgiveness is once all loan funds have been used, which can be after the 8-24 week coverage period ends. Remember that you must apply within 10 months of this coverage period in order to receive a deferment on your loan payments. If not, you’ll have to begin to make payments to repay the loan.
In order to qualify for full forgiveness, you must have followed certain requirements during the 8-24 week coverage period after receiving your loan. Employee and compensation levels must be maintained and 60% of the loan proceeds must be directed towards payroll costs. That means the other 40% is allowed to be allocated towards non-payroll expenditures such as business rent/lease payments, covered property damage costs and covered supplier costs. The necessary requirements can be viewed more in-depth on the SBA site here.
If my lender isn’t a part of the portal, what should I do?
While over 900 of the 5,500 lenders have already signed up to be part of the portal, many bigger banks, such as Bank of America and JPMorgan Chase, have opted out. You can search to see if your bank or lender is participating in the portal by downloading this spreadsheet located here.
If your bank or lender is not participating in the portal, then you must apply to have your loan forgiven directly through their own process. Your lender can provide you with one of three forms to apply for forgiveness and guide you through the process.
Read up here to learn more about the necessary criteria for the different forms or on how they differ.
What if Womply helped me obtain my loan?
Womply was greatly successful in helping over 1 million businesses obtain a PPP loan over the last year. However, Womply will not have any involvement in the loan forgiveness process and recommends contacting your lender directly for more information. If you applied for your loan through Womply, read up on their FAQs to see the next steps in getting your loan forgiven.
I submitted my loan forgiveness application to the portal, now what?
Now that you’ve submitted your application to the portal, you’re one step closer to getting your PPP loan forgiven. The portal has been successful so far in speeding up the loan forgiveness process with some applications being approved in less than 72 hours. There is a possibility that the SBA performs a review of your application meaning you will be contacted directly about the following steps to take and if needed, how to appeal any decision made by the SBA.
For direct assistance, you can contact the direct hotline: 877-552-2692. The hotline is open for assistance Monday to Friday from 8 a.m. – 8 p.m. ET. You can also consult this helpful guide created by SBA or the FAQ page for any other questions.