New Resources to Help You Get SBA PPP Loan Forgiveness

Great news if you have a Paycheck Protection Program (PPP) loan that you want forgiven: Recent updates to the process make applying for and receiving SBA PPP loan forgiveness way easier for those with loans of $150k or less. 

According to the SBA’s announcement, the new Direct Borrower Forgiveness Process simplifies and speeds up forgiveness and gives lenders a more efficient way of approving applications. Simpler, faster, and more efficient? Count us in.

Here’s what you need to know. 

The Latest Updates on SBA PPP Loan Forgiveness

Last week, the Small Business Administration (SBA) made two big announcements about the forgiveness process: There’s a new SBA portal that lenders can use to apply for forgiveness and a new way to document the reduction in revenue for second-draw loans. These two improvements should make a big difference to the forgiveness process.

Let’s take a look at each and how they can put forgiveness in your reach without eating into your time.

PPP Loan Forgiveness Portal

On August 4, the SBA launched its forgiveness portal, a space that allows borrowers to apply for forgiveness directly through the SBA. So rather than apply for forgiveness through your lender, you can log into the portal, submit your documentation, and apply for forgiveness right then and there. 

The portal walks you through filling out the 3508S forgiveness application form electronically.

In order to take advantage of the portal, your lender has to agree to participate. Right now, over about 900 banks and lending institutions are doing so, and it’s likely that more will jump on board. 

If your bank is participating, you can head to the Direct Forgiveness Portal to begin the process. The SBA aims to make it simple and fast to apply, but they’ve also set up a customer service team dedicated to answering questions and helping borrowers. You can reach them at 877-552-2692 Monday through Friday from 8 a.m.– 8 p.m. EST. 

If you want to get a head start on how the portal and process work, check out the SBA’s User Guide to Direct Forgiveness Portal.

COVID Revenue Reduction Score

If you have a second-draw PPP loan, i.e., you took out a second PPP loan in the second round of the program, you’re required to show a 25% or more reduction in your revenue from a quarter of 2020 compared to the same one in 2019. Many borrowers submitted their documentation with their second round application, but not all did.

If you’re in the latter camp, good news: There’s an alternative way to confirm your revenue reduction for your PPP loan of $150,000 or less. It’s called the COVID Revenue Reduction Score. 

Basically, the SBA provides a score for you based on things like your industry, business size, location, and economic data. The score will be available on the portal, allowing lenders to use it in place of traditional revenue reduction documentation.

The one caveat is that the score has to meet or exceed a value that qualifies you. If it does, you don’t need to submit any more documentation. If it doesn’t, you’ll have to submit the traditional documentation to your lender directly or through the portal. 

You can read more about the COVID Revenue Reduction Score in the new Interim Final Rule. The SBA will release more information about it in the coming weeks.

Frequently Asked Questions and PPP Loan Forgiveness Resources

If you still have questions about PPP loan forgiveness, here’s some helpful information followed by resources to learn more.

What is the deadline for PPP loan forgiveness?

The deadline varies depending on the terms of your loan. You can submit your loan forgiveness application at any time before the loan maturity date, either two or five years.

But it’s a good idea to apply for forgiveness sooner rather than later. You’ll have to start paying back the loan 10 months after the end of your covered period. So apply for forgiveness within 10 months to allow adequate processing time of your application and avoid making loan repayments.

If you’re applying for forgiveness through your lender and not through the portal, you should check with them on additional requirements or limitations. Because many lenders are overwhelmed, the SBA reports that some are limiting when they will accept forgiveness applications.

How long does forgiveness take?

Lenders have to provide a forgiveness decision to the SBA within 60 days of receiving the forgiveness application. 

Where can I learn more about forgiveness?

Here are some helpful resources:

• If you don’t qualify for full forgiveness, you might qualify for a partial amount. Learn how to calculate your partial PPP forgiveness here.
• Find out about the documentation and requirements for forgiveness for loans under $150k
• Dig into PPP forgiveness for self-employed, independent contractors, and sole proprietors
• Kickstart the process and apply for loan forgiveness by visiting the SBA’s Direct Forgiveness Portal
• Read all about forgiveness directly from the SBA
• Review the PPP loan forgiveness applications 

Have PPP questions? Ask them in our Finance Experts and Advice Group, filled with financial advisors and experts who can help.

Forgiveness is possible and easier than ever

Thanks to the latest PPP loan forgiveness update, getting your loan forgiven has never been easier, faster, or more convenient. So check with your lender to see if they’re participating and head over to the portal to start your seamless forgiveness process. 

Have you applied for forgiveness already? What was your experience like and how long did it take? Share your story in the comments below.