When Can I Submit My PPP Loan Forgiveness Application?

If you received a Paycheck Protection Program, your loan is fully forgivable, if spent properly. As you use up your PPP loan funds, you may start to wonder what the PPP forgiveness application deadline is. The short answer? It depends on when you got your loan. For all the details, read on.

Forgiveness Timeline

What is the PPP loan forgiveness deadline?

There is no deadline to apply for PPP loan forgiveness.

Lenders will continue accepting PPP forgiveness applications so long as borrowers have PPP loans. It’s recommended you apply for forgiveness before you need to make your first PPP loan payment. Here’s why.

PPP loans have a covered period of 8 to 24 weeks after the funds hit your bank account. Once that covered period ends, your loan payments are deferred for 10 months. Simply put, you don’t have to worry about making the first payment for approximately a year (8 to 24 weeks + 10 months) after the money hits your bank account.

At the end of the 10 month deferral period, you have to start making monthly payments with loan terms of 1% interest on a two to five year term. Therefore, it’s best to apply for forgiveness before this payment deferral period ends.

Can I apply for forgiveness now?

Some lenders are accepting forgiveness applications right now.

But others (like Chase and PNC) have put a pause on accepting forgiveness applications to make updates based on the new forgiveness application forms released on January 19, 2021. These are forms 3508, 3508EZ, and form 3508S.

Check in with your lender to see if they are currently accepting forgiveness applications.

Why are forgiveness applications not widely available right now?

When the second stimulus bill rolled out on December 27, 2020, big changes were made to the Paycheck Protection Program. This included:

  • A simplified PPP forgiveness application form for loan amounts of $150,000 or less.
  • New forgivable expenses such as operational expenses, supplier costs, and property damages related to 2020 riots or public disturbances.
  • A second draw PPP loan for businesses needing additional funding.

Both the SBA and lenders need time to update their forgiveness application process to account for these changes.

Where do I submit my application?

Each lender will be taking forgiveness applications through their own online portals. Check to see if your lender is accepting forgiveness applications. You may also be notified by email.

Use our guide below to find out what PPP forgiveness application form is best for you.

Which PPP forgiveness form do I use? (horizontal flow chart)

What can I do right now?

If your lender isn’t currently accepting PPP forgiveness applications, take this time to review your numbers to see if you meet the requirements to have your loan fully forgiven.

Some payroll providers (like Gusto) are offering forgiveness reports that provide you with a potential forgiveness reduction number based on your payroll activity. This will show the impact of any reduced headcount or salary and wages. These reports provide you with actionable steps to take if you have not met the terms for forgiveness on the entirety of the loan due to payroll activity.

You can also start gathering the required documents for when applications open. You can find a list of documents in our simple guide on PPP loan forgiveness.

At Bench, we will help you stay on top of all of your forgivable expenses. Before applying for forgiveness, our expert team is ready to take on any question you have and help you identify the information you need to fill out your forgiveness application. Learn more about how we support businesses with PPP loans.

Other COVID-19 Resources

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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