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The 60-day exception period ends March 3, 2024. PPP borrowers can use this time to apply for loan forgiveness and COVID EIDL borrowers can explore repayment options, including hardship repayment plans that can reduce monthly payments down to $25.
Those who have met the payroll requirements can complete the PPP forgiveness application, “which takes most borrowers less than 15 minutes,” the SBA stated in a press release. Instructions are available on the SBA website and borrowers can verify the status of their PPP loans by logging in the MySBA loan portal, where forgiven loans will be listed as “paid in full.”
PPP borrowers can avoid default and have qualified loans forgiven when the employer demonstrates the borrowed money went to employee payroll.
The SBA has distributed over $400 billion in COVID-19 EIDL funds and facilitated nearly $800 billion in PPP loans through third-party lenders.In the U.S., there have been 70,197 PPP loans disbursed, totaling nearly $2.78 billion. The majority of these loans have already been forgiven, highlighting the program's success.
The SBA is using this period to reach out to affected businesses, ensuring that PPP borrowers are aware of the forgiveness application process and that COVID EIDL borrowers understand all available repayment options, including hardship repayment plans. Meanwhile, the SBA has paused all collection activities on SBA EIDL loans, allowing borrowers to reassess and manage their financial commitments without the immediate pressure of collections.
What this means for small business owners
For those holding PPP or SBA EIDL loans, the goodwill period is a lifeline, offering a chance to avoid defaulting without the immediate burden of repayment. Avoiding a loan default and collections significantly improves a borrowers long-term financial prospects, including better credit scores, eligibility for future government financial aid.
“The benefits of getting, and staying, current on SBA loans include better credit scores, which make it cheaper and easier to buy a home or car in the future; eligibility for future government financial assistance like a VA loan or help after a natural disaster; and, in some cases, avoidance of federal and private collections activities which can include withholding tax returns and wage garnishment,” the release stated.
For COVID EIDL borrowers, while repayment is mandatory, the SBA offers support through hardship accommodation plans, which can significantly lower initial monthly payments.
Further reading: Understanding the PPP forgiveness application
The takeaways
- The 60-day goodwill exception period ends March 3, 2024 and is accessible to those with loans under $100,000.
- PPP borrowers can avoid default and have qualified loans forgiven when the employer demonstrates the borrowed money went to employee payroll.
- EIDL borrowers can explore hardship repayment plans that can reduce monthly payments down to $25.
- The forgiveness application takes less than 15 minutes
- To check the status of your PPP loan log in at the MySBA loan portal. Loans that have been forgiven will be indicated as 'paid in full.'
