Paycheck Protection Program Updates – July 2021

PPP Loan Payments May Be Due for Some Borrowers – PPP loan borrowers have ten months after their “Covered Period” ends (anywhere between 8 and 24 weeks after receiving loan proceeds) before loan payments are required. Borrowers can apply for forgiveness at any time before the loan matures but will need to start making payments if they apply after this ten-month period. For those who received a PPP loan at the beginning of the COVID pandemic, it may be close to the end of their ten-month window, and payments may be required soon.

Reach out to your lender and they will let you know how to begin your PPP loan forgiveness application process.

PPP Loan Necessity Questionnaire Update – On July 9, 2021, the SBA informed lenders it will no longer require the loan necessity review for PPP loans of $2 million or greater. An FAQ is expected to be released soon, but the changes are effective immediately. The Loan Necessity Questionnaire is no longer required for not-for-profit borrowers (SBA Form 3510) or for-profit borrowers (SBA Form 3509). The change is a result of a lawsuit filed by the Associated General Contractors of America (AGC) in December 2020 challenging the legality of the questionnaire.

If you received a request for Form 3510 or Form 3509, it’s advised that you contact your lender for instructions on how to proceed given this new update.

As always, please contact us if you have any questions about your PPP or other SBA loan.