SBA Announces Paycheck Protection Program Direct Forgiveness Portal

The U.S. Small Business Administration (SBA) published new guidance last Wednesday designed to simplify and speed up the forgiveness process for businesses and not-for-profits with Paycheck Protection Program (PPP) loans of $150,000 or less.

Despite earlier moves to streamline the forgiveness process for those loans, many smaller PPP lenders have informed the SBA that they lack the technology and manpower to develop efficient electronic loan forgiveness platforms to process applications.

As a result, the SBA announced that it will launch a new application portal, allowing borrowers to apply for forgiveness directly with the agency instead of having to go through their lender. More than 600 banks have agreed to allow access to the portal for more than 2.17 million borrowers. Starting today, August 4th, the SBA PPP Direct Forgiveness Portal is currently operating under an invite-only pilot period. The platform is scheduled to publicly launch in the near future.

For borrowers whose lender is not participating, you must apply through your lender. Your lender can provide you with either the SBA Form 3508, SBA Form 3508EZ, SBA Form 3508S, or a lender equivalent. Your lender can provide further guidance on how to submit the application.

To Register For the Portal and Apply for PPP Forgiveness, Click Here.

In addition to the platform, the SBA is establishing a PPP customer service team to answer questions and directly assist borrowers with their forgiveness applications.  Borrowers that need assistance or have questions should call (877) 552-2692, Monday – Friday, 8 a.m. – 8 p.m. EST.

Impact On Your Business

The Paycheck Protection Program was first passed by Congress in March 2020 as part of the first round of coronavirus relief in response to the pandemic. Between 2020 and 2021, it has provided more than 11.7 million loans totaling nearly $798 billion to help hard-hit businesses. But according to tracking by the Pandemic Response Accountability Committee, only 4.1 million loans had been forgiven as of June 30, totaling $394.6 billion.

You need to understand your forgiveness window and the appropriate applications to request forgiveness, otherwise, you’ll have to start making monthly payments of principal and interest.

Borrowers can apply for forgiveness at any time following the end of their covered loan period, which can range between 8 and 24 weeks, at the borrower’s option.  If borrowers have not applied for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.

While businesses can apply for PPP loan forgiveness, the program for new loans closed at the end of May.

How KatzAbosh Can Help

Each borrower has their own individual set of circumstances, and the answers are not always clear. If you have questions about your situation, please reach out to your KatzAbosch representative or contact us by clicking here.

To learn more about our PPP services, click here.

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