“Should You File for PPP Loan Forgiveness Now, or Wait Until Later?,” Brainyard

November 30, 2020

In an article published by Brainyard on November 30, 2020, Christina Moore provides insight on whether businesses should file for Paycheck Protection Program (PPP) loan forgiveness now or wait until later. As rules around the PPP continue to evolve, Moore interprets the latest developments.

According to Moore, choosing whether to file for loan forgiveness now is largely a matter of the size of the loan your business received. Some businesses may want to collect documentation that proves the necessity of their original loan application, in case the Small Business Administration’s request to confirm said necessity is approved. “PPP borrowers with loans $50,000 or under should file for forgiveness now,” said Moore. “The SBA has simplified the forgiveness process for them.”

For PPP borrowers with loans over $50,000, I think a business should consider starting the process if it has:

  1. Spent its PPP funds during what the SBA refers to as the Covered Period or Alternative Covered Period (8 weeks or 24 weeks); and
  2. Does not have a reduction in its FTEs.

On the other hand, if a PPP borrower with a loan over $50,000 is struggling with its FTEs — i.e., has had a reduction — and anticipates rehiring prior to Dec. 31, 2020, I think those borrowers should wait to file. “While there are safe harbors [provisions that grant forgiveness even if a company doesn’t meet all the criteria] in place for a reduction in FTEs, some safe harbors provide for the safe harbor only until the earlier of filing for forgiveness or Dec. 31,” explains Moore. 

To read the full article, please click here.

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