An initiative designed to forgive loans to businesses secured through the Paycheck Protection Program could well last until the end of next year, at the very least.
So says officials with the Small Business Administration, which oversees the much-used program designed to provide low-interest loans to businesses to help them meet their payroll needs.
Established through the Coronavirus Aid, Relief, and Economic Security Act in early 2020 during the initial months of the Covid-19 outbreak, the program as of late last year had approved more than $500 billion in loans.
Responding to changing conditions, an initial loan application deadline of June 30, 2020, was later extended to August 8, with the entire program reopened in January of this year and finally officially ended on May 31.
Now the SBA has announced that borrowers may continue to apply for loan forgiveness, if staffing levels at the business receiving PPP money were maintained and the loan proceeds really were spent on payroll costs.
To date, in excess of 9 million small businesses have applied to have their Paycheck Protection Program loans forgiven. According to SBA figures, more than $662 billion out of a total of $791 billion have thus far been forgiven.
Continued loan forgiveness will apply to businesses who have used up their loan proceeds, provided that the business in question applies for that forgiveness within 10 months after the last day of the period covered by the original loan.
Businesses failing to apply for forgiveness with the SBA during that same window of time, however, will be required to make payments to their PPP lender.
As of November some 62% of all PPP loans in the 2021 version of the program have been fully or partially forgiven.
By Garry Boulard