SBA PPP Small Business Loan Forgiveness Deadline Updates

by Joe Panettieri • Feb 18, 2022

Amid COVID-19 economic fallout, many small businesses with 500 or fewer employees navigated the CARES Act and Paycheck Protection Program (PPP) for emergency loans and grants.

Guidance from the Small Business Administration (SBA), the U.S. federal government & banks evolved over time. And a second round of PPP funding round surfaced in early January 2021. PPP Round Two ran out of funding in May 2021. But many small businesses continue to navigate the program to understand payback terms, forgiveness application deadlines and more.

Check this blog for ongoing CARES Act and SBA updates involving:

1. The Paycheck Protection Program;
2. EIDL Loan Advance;
3. SBA Express Bridge Loans; and
4. SBA Debt Relief.

Blog originally published Sunday, April 5, 2020. Updates are ongoing.

February 17, 2022:

• Unforgiven PPP Loans: Small businesses still face $28 billion in unforgiven loans, Bloomberg reported. That sum spans nearly 350,000 loans made to small businesses, and most of the loans are for less than $25,000. Source: American Banker, February 17, 2022.

September 10, 2021:

• SBA Loan Forgiveness Update: The SBA has forgiven — in whole or in part — more than half of the nearly 11.5 million Paycheck Protection Program loans made across 2020 and 2021. Source: The Business Journals, September 10, 2021.

September 9, 2021:

• EIDL Loan Cap Increased: The SBA has increased the COVID Economic Injury Disaster Loan (EIDL) program loan cap to $2 million. The EIDL program now also features expanded use of funds to pay and prepay business debt, streamlined review processes, and deferred payments. Moreover, the first approval and disbursement of loans of $500,000 or less has also been introduced. Source: SBA, September 9, 2021.

September 8, 2021:

• PPP Loan Forgiveness Delays: The SBA and some PPP lenders are clashing over alleged delays in loan forgiveness. The agency says some lenders are too slow. By contrast, some lenders accuse the SBA of threats. Some PPP borrowers are caught in the middle of the finger pointing. Source: Silicon Valley Business Journal, September 8, 2021.

August 17, 2021:

• PPP Loan Fraud: Roughly 15% of Paycheck Protection Program (PPP) loans could be fraudulent, new study alleges. Moreover, approximately $76 billion of the program’s $800 billion in loans may have been taken improperly, the study says. Source: The New York Times, August 17, 2021.

August 6, 2021:

• PPP Loan Forgiveness – One Bank’s Move: PNC Financial Services Group, which is Pittsburgh’s biggest bank, is using its own portal for PPP forgiveness applications instead of a newly launched one by the SBA. The SBA portal allows certain loan recipients to bypass their lenders. PNC Financial Services is opting out of the SBA loan forgiveness portal because the bank has “already built a streamlined end-to-end digital portal and associated review process, the bank said. Source: Pittsburgh Business Times, August 6, 2021.

July 28, 2021:

• SBA PPP Loan Forgiveness Application Website: The Small Business Administration has set up its own online, consumer-facing loan forgiveness platform. Rather than forcing borrowers to apply through banks, the SBA PPP loan forgiveness site will accept applications from small borrowers directly in a format that officials estimate will take businesses just a few minutes to go through. Lenders will still have a say in whether individual PPP loans should be forgiven, but the intent is to reduce the amount of time and effort that banks have to invest in the process. In addition, the SBA will announce plans to spare certain borrowers who received second PPP loans this year worth less than $150,000 from having to supply documentation proving that they suffered a 25 percent revenue reduction in 2020 that was required to receive the aid. Source: Politico, July 27, 2021.

July 27, 2021

• PPP Loan Forgiveness Update: The SBA on July 28, 2021, plans to outline a new initiative aimed at encouraging borrowers with loans of $150,000 or less — accounting for more than 90 percent of the pandemic-era program — to apply for loan forgiveness. The ability to convert PPP loans into grants in exchange for maintaining payroll was a critical feature of the small business rescue. Nearly 7 million of those loans have not been forgiven. Source: Politico, July 27, 2021.

July 2, 2021

• PPP Loan Forgiveness Deadline: Loan recipients have up to 10 months from the end of their “covered period” to apply for loan forgiveness before they become responsible for payments and interest. For some of program’s earliest applicants in April 2020, there was an eight-week covered period, meaning the deadline to apply for loan forgiveness would fall sometime in mid-July 2021. Later applicants operated under a 24-week covered period, meaning deadlines could come as early as September 2021. Source: Staten Island Live, July 2, 2021.

Friday, May 28, 2021:

• PPP – No New Loan Applications: The PPP program closed to new applications on Friday, May 28, as funding was on track to be exhausted. That marked the end of a $961 billion emergency effort that helped millions of small businesses survive the pandemic but was dogged by fraud claims and criticism that it didn’t reach the neediest businesses. The program had been scheduled to end on May 31, but the Small Business Administration said in a notice to lenders that “due to the high volume of originations today, the portal will be closing for new originations” on May 28. Source: The Wall Street Journal, May 29, 2021.

Thursday, May 6, 2021:

• PPP Money – Nearly All Gone: Only $8 billion remains available. Source: CBS News, April 6, 2021.

Wednesday, March 31, 2021:

• PPP Money – Gone By Mid-April?: That’s the thesis from the SBA. Source: Inc., March 31, 2021.

Tuesday, March 30, 2021:

• Biden Extends PPP Deadline: President Biden, as expected, extended the PPP application deadline to May 31, 2021.

Friday, March 26, 2021:

• PPP “Hold Code” Concerns: The SBA has currently placed “hold codes” on 190,000 PPP loans. These so-called hold codes can stem from anything from typos in Social Security or taxpayer identification numbers to more serious issues. And they can be placed upon both loans that have yet to be paid out and those that are in the forgiveness process. Facing pressure from small business activists, the SBA is taking steps to clear up the hold codes. Source: Silicon Valley Business Journal, March 26, 2021.

Thursday, March 25, 2021:

• PPP Application Deadline Extended to May 2021: The U.S. Senate voted to extend the PPP program until the end of May 2021, giving small businesses more time to apply and the government more time to process requests. The National Retail Federation (NRF) and nearly 100 other business groups voiced their support of the PPP Extension Act of 2021.  Sources: Reuters and the National Retail Federation, March 25, 2021.

Tuesday, March 23, 2021:

• More PPP Changes?: Some PPP loan recipients claim loan term changes came too late to help their businesses. Now, they’re pushing Congress for retroactive PPP changes. Source: The Wall Street Journal, March 22, 2021.

Tuesday, March 16, 2021:

• PPP Application Deadline Extension: The House passed a bill extending the deadline for applying for a PPP loan to May 31, sending the legislation to the Senate as the current March 31 deadline looms. Source: The Wall Street Journal, March 16, 2021.
• PPP Duplicate Loan Concerns: The Small Business Administration mistakenly paid close to $692 million in duplicate PPP loans to thousands of small businesses, even as others struggled to secure enough financing to stay afloat during the pandemic, according to a new report published by the agency’s in-house watchdog. Source: Fox Business, March 16, 2021.
• PPP Loan Fraud: A Washington technology executive has pleaded guilty to wire fraud and money laundering after obtaining $5.5 million in PPP loans and laundering the proceeds. Mukund Mohan of Clyde Hill submitted eight fraudulent PPP loan applications on behalf of six different companies, according to the U.S. Attorney’s Office. Source: Associated Press and an NBC Affiliate, March 16, 2021.

Thursday, March 11. 2021:

• Proposed PPP Deadline Extension: Ahead of its current expiration date on March 31, the House Small Business Committee introduced legislation on March 11 to extend the Paycheck Protection Program (PPP) through the end of May, providing further relief for small businesses. Source: Business Insider, March 11, 2021.

Wednesday, March 10, 2021:

• PPP Errors & Potential Deadline Extension: Rep. Blaine Luetkemeyer said that error codes are holding up as many as 50,000 PPP loan applications and that 10,000 of those may not get be resolved by the end of March 2021. Against that backdrop, the Missouri legislator said it is “very concerning” that Small Business Administration would be forced to stop processing loans at the end of the month. Source: American Banker, March 10, 2021.

Thursday, March 4, 2021:

• PPP Update for Sole Proprietors: The latest PPP updates may appeal to sole proprietors or owners of very small businesses. The updates: An Interim Final Rule (IFR) clarifies that Schedule C filers can use gross income rather than net, as previously specified. They also released new applications for First-Draw Borrowers and Second-Draw Borrowers. Source: Forbes, March 4, 2021.

Tuesday, March 2, 2021:

• PPP Application Deadline – Part One: The current PPP program expires March 31, but small business and nonprofit groups are pushing to extend it. Source: Silicon Valley Business Journal, March 2, 2021.
• PPP Application Deadline – Part Two: On a related note, the AICPA (a major accounting association) called on Congress to extend the PPP application period by at least 60 days. Source: Journal of Accountancy, March 2, 2021.

Monday, February 22, 2021:

• PPP for Small Businesses With 20 Employees And Fewer: The Biden administration announced that the PPP program will be available only to small businesses with fewer than 20 employees during an upcoming two-week period. The special period, which is slated to start February 24, comes after PPP loans in 2020 went to some larger businesses and publicly traded companies, leading to a backlash and returns of the money. Source: MarketWatch, February 22, 2021.

Wednesday, February 10, 2021:

• SBA PPP Loan Process Fixes: The SBA has  taken steps to improve the PPP loan process after an outcry from industry groups over flaws in the program (see February 3 update further below). The SBA said it would allow lenders to directly certify the eligibility of small-business borrowers for first- and second-draw loans that had received validation errors, part of a bid to speed up the process. Lenders will also be able to upload supporting documentation for small businesses that had validation errors during the forgiveness process, the agency said. Source: Silicon Valley Business Journal, February 10, 2021.

Thursday, February 4, 2021:

• PPP Round Two Stats: More than 891,000 borrowers received a total of $72.7 billion from banks and other lenders between January 11, 2021 and January 31, 2021 as part PPP round two, according to the SBA. That means roughly 26 percent of PPP round two funds authorized by Congress in December 2020 have now been allocated. Source: Newsday print edition, February 4, 2021.

Wednesday, February 3, 2021:

• CPAs Express PPP Concerns: The American Institute of CPAs (AICPA) today sent a letter to the SBA raising concerns about the challenges small businesses are facing with the the current PPP loan application system. The AICPA’s letter acknowledges the important, additional checks that were put in place to address fraudulent applications. However, it adds, “these validation checks are causing tens of thousands of legitimate applications to be denied acceptance by the SBA. Lenders and loan applicants do not understand the process to resolve these declines, creating great anxiety and confusion for small business owners.” Source: AICPA, February 3, 2021.

Monday, February 1, 2021:

Intuit QuickBooks and PPP Loans: The Intuit QuickBooks business has taken several steps to assist QuickBooks customers with second PPP loan applications. Specifically, PPP Eligible QuickBooks customers can:

• apply for a second PPP loan within QuickBooks Capital’s automated PPP application experience;
• leverage business data that’s already on the QuickBooks platform;
• leverage a partnership with SBA-approved lender Cross River Bank to help additional eligible customers facilitate PPP applications directly through Cross River Bank’s platform.

Wednesday, January 27, 2021:

• SBA Loan Data & Record Keeping Problems: The SBA has found “anomalies” in 4.7 percent of the 5.2 million loans it made through August 2020. The data errors within the SBA’s system has complicated efforts by some borrowers to obtain second-round loans. Source: The New York Times, January 27, 2021.
• SBA PPP Loan Portal Problems: In a letter to the acting heads of the Small Business Administration and Treasury Department, the American Bankers Association mentioned several significant issues that have arisen since the PPP re-opened in January 2021. Specifically, ABA flagged that the PPP portal does not permit lenders to upload borrower applications for second-draw loans if the borrower still has a pending forgiveness application for a first-draw loan with SBA. Lenders have also reported receiving a high number of incorrect error messages when submitting PPP loan applications for the portal, ABA said. Source: ABA Banking Journal, January 25, 2021.
• PPP Round Two Loan Totals: The Small Business Administration has approved $35 billion in Paycheck Protection Program loans since opening its loan portal on January 11, 2021, according to new agency data. That dollar figure spans 400,580 round two loans through January 24,2021. Source: Silicon Valley Business Journal, January 27, 2021.

Tuesday, January 19:

• In the program’s first week, the SBA approved around 60,000 applications from nearly 3,000 lenders. Those applications totaled $5 billion, consuming around 2 percent of the $284 billion the program has available to lend. Source: The New York Times, January 19, 2021.
• The PPP loan portal will fully open today, January 19, 2021 to all participating PPP lenders to submit first- and second-draw PPP loan applications. Source: Newtek.

Saturday, January 9:

The U.S. Small Business Administration (SBA), working with the Treasury Department, will re-open the Paycheck Protection Program the week of January 11, 2021, for new borrowers and certain existing borrowers. Details from the SBA include:

• To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13.

Additional key PPP updates, according to the SBA, include:

• PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
• PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
• The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;
• The PPP provides greater flexibility for seasonal employees;
• Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
• Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

• Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
• Has no more than 300 employees; and
• Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

The new guidance released includes:

• PPP Guidance from SBA Administrator Carranza on Accessing Capital for Minority, Underserved, Veteran, and Women-owned Business Concerns;
• Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act; and
• Interim Final Rule on Second Draw PPP Loans.

For more information on SBA’s assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares.

Jim Turner, EVP of Hilltop Consultants, an Intelliteach Company

Friday, January 8:

• PPP and Small Business Cloud Software: The new PPP legislation updates the definition of operational expenditures eligible for PPP funds to include any business software or cloud computing service facilitating business operations, product or service delivery, human resources and other expenses, according to the bill. Source: CIO Dive, January 6, 2020.
• MSP Lobbied for Outsourced IT Funding: Hats off to Jim Turner, EVP of business development at Hilltop Consultants, an Intelliteach Company. Turner lobbied for PPP funding legislation to include money for outsourced IT spending. As the Small Business Cloud Software blurb above suggests, Turner’s petition apparently was heard. Source: Change.org

Thursday, January 7, 2021:

Isabel Guzman: Next SBA leader?

• PPP Round Two – Small Lenders Head Start: The Small Business Administration plans to give small lenders a head start with this round two program. In its first two days, the program will accept loan applications only from community lenders like Community Development Financial Institutions, which specialize in working with low-income borrowers and in areas underserved by larger lenders. Source: The New York Times, January 7, 2021.
• Second Loans Exceeding $150,000: For second loans of more than $150,000, applicants will need to provide their lender with records proving their sales have declined. Lenders will need to do a “good faith review” of those documents. Source: The New York Times, January 7, 2021.
• Second Loans Below $150,000: For smaller loans, borrowers will not need to provide their sales records as part of their application, but the SBA can request them later. Source: The New York Times, January 7, 2021.
• New SBA PPP Leader – Biden’s Nomination: President-elect Joe Biden has chosen Isabel Guzman, a California economic development official, to lead the Small Business Administration. The pick is subject to approval. Source: The Wall Street Journal, January 7, 2021.

Read earlier PPP updates by visiting the next page….