PPP loan application deadline was extended to August 30, 2021. The Small Business Administration also extended the SBA submission deadline for the banks. Meanwhile, on May 31st, a provision of an extra 30 days is released.
This is to review the applications received earlier in May. All the applicants in the first draw had to go through less must-haves during the process. The companies are now required to fulfill some of the very new conditions for the second draw of the PPP loan.
What is PPP Loan Forgiveness?
The Paycheck Protection Programme allows borrowers to apply for loan forgiveness by utilizing for eligible payroll costs, payments on business mortgage interest payments and rents.
In fact, one can also submit a forgiveness after the covered period of 8-24 weeks.
The PPP loan application deadline is March 31st , 2021 as of now. All the eligible borrowers who desire to apply for the first draw or second draw must apply as soon as possible. However, the applications must be in view of all the requirements.
Do keep in mind this year’s funding available for the Economic Aid Act. One should also consider their experiences from the first draw of PPP loan applications.
First PPP Loan Forgiveness Deadline 30th August, 2021
So, the deadline for applying for forgiveness is August 30, 2021 as the extension says. The lender makes the applications for forgiveness. The Small Business Administration has opened a PPP Loan Forgiveness Portal. The applications for the ppp loan application deadline can also be made via PPP Loan Forgiveness Portal.
The covered period starts the day you deposited the money and obtained a Paycheck Protection Loan. The loan documents clearly mentions the covered period of 8-24 weeks. It’s important to note that the loan forgiveness deadline ends precisely ten months after the end of your covered period.
The usual date for the deadline of the first set of PPP loan draws was 30th October, 2020. To avoid the confusion just calculate ten months forward which will lead you to 30th August, 2021. The borrowers will have to start paying off their loans to their PPP lenders.
The PPP funding for loans done by lenders not belonging to any community of financial institutions is exhausted. The Small Business Administration will not accept any new PPP loan applications from other lenders which are not from community financial institutions.
The Second Round of PPP Loans
The Second Stimulus Bill was passed on 27th December, 2020.
It got the second lot of PPP Loans. The application deadline remains the same for the second draw of PPP loans. Make sure to keep track of your covered period. As announced by the Small Business Administration the covered period will be from 8 to 24 weeks. The deadline is ten months after the finishing of the covered period.
Note: If you have received advance for any Economic Injury Disaster Loan, it will no longer be subtracted from the PPP loan forgiveness amount of the borrower.
The three types of application forms
The borrowers have to submit the forgiveness application anytime after the close out of the covered period. You don’t have to wait for a longer period of ten months for your ppp loan application deadline.
Don’t know which form to use for your loan forgiveness application? Here we bring you the three types of forms which you can use for submission as per your rules and requirements. Do take a look!
1. 3508S: You can use the SBA form 3508S to apply for the loan forgiveness of whether your first or second draw PPP loan. Use this only if you have received from your lender the PPP loan of less than $ 150,000 or $150,000. Borrowers who have received a loan for instance $ 2 million are not eligible to use this form for the loan forgiveness application.
2. 3508EZ: The self-employed borrowers with no employees are eligible to use this form. Secondly, borrowers who had not reduced the salaries of their employees by 25%. This also includes borrowers who did not decrease employee hours or business activity mostly because of the pandemic. The 3508S and 3508EZ forms are easier and shorter to use than other forms for PPP forgiveness.
3. 3508: The Small Business Administration releases it on May 15h of 2020 for borrowers who had to apply for loan forgiveness. All the borrowers have to complete this document to fulfill their loan forgiveness request. However, the other versions of 3508 like 3508S and 3508EZ have excelled in the 3508 form as they are easier to use.
Use the above application forms for requesting loan forgiveness within the ppp loan application deadline. However, note that for every PPP loan a separate loan forgiveness form must be used. You can’t use the same form for the loan applications of the second and the first draw of PPP loans. Make sure to use a different form for the first draw and a different form for the second draw.
Hence, the ppp loan application deadline is May 31st from March 31st, 2021 for both the first and second rounds of PPP loan applications. This is a consequence of the PPP Extension Act that President Joe Biden signed on March 30th, 2021. With this SBA has also extended the covered period alongside 30 days for the review of applications. Also, to apply for the second round of PPP loans make sure to know the new additional rules and requirements updated by the authorities.
Also read: How To Prepare For A Business Loan