Jhe COVID-19 pandemic has wreaked havoc on our lives over the past few years, as the United States and the whole world has come to a standstill due to the lockdowns that have been enforced around the world.
One of the hardest-hit groups was smallholders, who were forced to close their businesses following the lockdown and other covid-related mandates.
What are PPP loans?
Introduced in March 2020, the PPP Emergency Loan Program was formed under the $2 trillion CARES Act. The law authorized the distribution of more than $600 billion in forgivable loans to small businesses, to help them weather the pandemic and mitigate their losses.
The loans were disbursed in two rounds, with most business owners getting up to 2.5 times their monthly salary expenses, based on their 2019 and 2020 tax returns.
Although the program officially ended in May 2021, small business owners may still be eligible for loan forgiveness.
How do I apply for loan forgiveness?
Small business owners can request PPP loan forgiveness once all loan products for which the borrower is requesting forgiveness have been used.
These borrowers can apply for forgiveness at any time up to the maturity date of the loan.
However, if a borrower does not request loan forgiveness within 10 months of the last day of the covered period, payment of the PPP loan cannot be deferred and borrowers will have to start repaying their PPP loan.
The following steps must be completed to apply for the PPP Loan Forgiveness Program:
- Determine if your lender participates in direct forgiveness through the SBA;
- Compile a list of your documentation;
- Submit the forgiveness form and documentation to the SBA or your PPP lender;
- Monitor your request for forgiveness.