When to Submit PPP Loan Forgiveness Applications?

    The Paycheck Protection Program (PPP) has been a very useful tool to help many businesses stay open during these challenging times. However, there are many questions surrounding when is the best time to submit the applications for forgiveness of these loans. There are different ideas, but this post and the ones that follow will shed some light on what to do in different situations.

    If you are using the last of funds or coming to the end of the forgiveness period, the application is not required until 10 months after the end of that forgiveness period. With that understanding, you do not have to wait. If the money’s all gone and you are confident that full forgiveness can be reached, it makes sense to apply. This is one reason why it makes sense to wait.

    Applying early will not change forgiveness reductions. For example, if a business has reduced salaries of employees by 25%, that must be accounted for during the entire 8 or 24 week period. It will reduce the overall amount of qualified expenses that can be claimed. It makes sense that the borrower would wait to have the correct information to submit. A Qualified Tax Professional would be able to help you understand these details. Our next post will give another reason why it might be good to wait to submit a forgiveness application.

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