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What you need to know about PPP loans today

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  • Many of the Bank Forgiveness Application portals are now live!
  • Auto Forgiveness:
    • legislation is still pending for granting automatic forgiveness for loans <$150,000 .
    • If the change is made, a small business with a loan of less than $150,000 could have their debt forgiven if the borrower fills out a one-page form and attests that the funds were used in accordance with PPP guidelines. The current forgiveness application requires a detailed accounting of how the money was spent.  
  • Are you eligible?
    • Only loan proceeds spent on qualified expenses are entitled to forgiveness. Qualified expenses include payroll expenses (minimum 60% of proceeds) and non-payroll expenses (up to 40% of proceeds). For a full list of all qualified expenses and items that may reduce your forgiveness amount, please visit
    • Your loan proceeds must have been spent (or incurred, per program guidelines) within your covered period, which begins on the date your PPP loan was funded. Submitting a forgiveness application before spending your loan proceeds on qualified expenses could reduce your forgiveness amount.
  • Check with Breakwater!
    • Banks are encouraging clients to consult with an accountant or an advisor before applying, as a forgiveness application can only be submitted once through the Bank to the SBA.
  • How/when can you expect a decision
    • The SBA has 90 days from the receipt of the forgiveness application to complete the review and give a decision.
    • The Bank will notify the client of the final decision.
  • What’s the deal with paying it back?
    • the borrower submits its loan forgiveness application within 10 months of the Covered Period, they are not required to make any loan payments until the forgiveness amount is remitted to the lender by the SBA or advises how much of  the loan is not entitled to forgiveness to the Bank.
    • If any part of the loan issued after 6/5/20 the loan will have a 5 year maturity date, if the loan was received prior to 6/5/20, the maturity date will be 2 years unless the lender and borrower agree to extend the term to 5 years.
    • Deferred payments of employer taxes ends 12/31/2020 – first required payment = 50% of deferred taxes due 12/31/21, and  2nd payment of remaining balance due 12/31/22. Can be paid back earlier, but must be paid separately from “regular” tax payments.