SBA PPP Loans

Paycheck Protection Program and Loan Forgiveness

What you need to know about SBA Paycheck Protection Program (PPP) loan forgiveness

 

We know you’re eager to understand more about loan forgiveness and how you might be eligible for forgiveness of your PPP loan. Unfortunately, we aren’t able to provide you details on how loan forgiveness will work because the U.S. Small Business Administration (SBA) has not yet issued final regulations on loan forgiveness procedures. 

If you’ve received a PPP loan from CoVantage, here are some things you should keep in mind:

  • The deposit you received is  a disbursement from a loan, and payments are deferred for 6 months. 
  • The loan will accrue interest at a rate of 1% during the deferment period.
  • After the six-month deferment period, any balance (including any accrued interest) that is not forgiven will become an 18-month term loan with an interest rate of 1%, and you’ll need to start making monthly payments. 

According to the SBA, your entire CoVantage PPP loan may be forgiven if you use the money for eligible expenses during the eight-week period after you received it. 

  • You’ll be able to apply for loan forgiveness after the eight-week period. 
  • When you apply for forgiveness, you’ll need to provide documentation of your eligible expenses. 

For the most current guidance available about PPP loan forgiveness, please visit the SBA website. Additional guidance is expected to be issued so be sure to check the SBA website frequently.  The SBA has also published a series of Frequently Asked Questions with answers, which is being actively updated (“SBA PPP FAQ”). 

You may also wish to consult your own tax and legal advisors.

For those who did not get a chance to apply for or approved for a PPP loan that need assistance, there are other SBA relief loan programs available. These are called Economic Injury Disaster Loans (EIDL) and you must apply directly to the SBA. You can apply for EIDL loans at www.sba.gov