Many business owners, independent contractors, and sole proprietors applied for the PPP program at the start of the pandemic. But how many people that applied for the Paycheck Protection Program applied for PPP Loan Forgiveness? But what should you know when you are applying for PPP Loan Forgiveness? Did the deadline pass to apply? Is it too late apply for the PPP Loan Forgiveness?
These are all fantastic questions to ask and something that we can look into right now in this brief guide.
Remember that this is a simple guide that will go through the first Paycheck Protection Program that came about at the start of the pandemic. Business owners and those who fall into the right category can apply for further assistance in the newly released stimulus bill that was approved in the latter half of December 2020.
Let us take a look at some of the questions that most people may ask when it comes to PPP loan forgiveness.
PPP Loan Forgiveness Application For Sole Proprietors, Independent Contractors, and Self-Employed Individuals
Sole proprietors, independent contractors, and self-employed individuals who were the only employee at the point of the PPP loan application process did not note any other representatives who worked for the firm can easily use the Loan Forgiveness Application Form 3508EZ to finalize the application.
It looks like it is straightforward for individuals who fall under this category.
Do You Still Have to Pay Your Loan if You Submitted The PPP Loan Forgiveness Application Early On?
Suppose you went through a lender for your application, then you submitted the right form for forgiveness. Do you still owe anything in the meantime while you wait for the SBA to remit the payment?
The borrower, you, do not have to make any payments, as long as you are able to submit the loan forgiveness application within ten months of the completion of the Covered Period. The loan may be fully forgiven or partially forgiven, depending on your situation.
If you notice that the loan is completely forgiven, then you do not have to worry about making any payments. But if you see that only a certain portion of the loan is forgiven, then you must the remaining balance is your responsibility. It is your responsibility to pay it in a timely manner before it is wholly due.
Does Interest Accrue For The PPP Loan Even If there’s PPP Loan Forgiveness?
Yes, interest will accrue for the PPP loan between the time it was given and when the SBA sends the remittance for full forgiveness. You must ensure to pay the accrued interest on any part of the loan that was not forgiven by the SBA.
Does the Lender Have To Communicate Information Regularly?
The lender must continue to provide information on the status of the loan from remittance of the funds by the SBA or the lack of forgiveness. The lender must also notify the borrower when the payments will start to be due by given their terms.
Do You Have To Ask Forgiveness By October 31, 2020?
No, you do not have to ask forgiveness by October, 2020. You do have to ask forgiveness via the PPP loan forgiveness application forms. Borrowers can submit an application before the maturity date or when the loan comes due. The loan should be due within 2-5 years from when the loan was disbursed. But you must make sure to apply for forgiveness within ten month after the last day of your loan forgiveness covered period,. If you do not, you will find that loan payments are not deferred and that you will have to start making payments on it.
So if you’re covered period ended in November 2020, you have until ten months after that time to ask forgiveness to be able to minimize ongoing burdens.
All information present within this simple guide was sourced from the SBA.
Disclaimer: Make sure to double check with the SBA or your lender if you have further questions regarding the PPP Loan Forgiveness program.