The US Small Business Administration has begun the Paycheck Protection Program Loan Forgiveness from 13 March 2024. Eligible PPP borrowers can apply for loan forgiveness, and the government has simplified the process. The borrowers can check the rules and conditions for PPP Lan forgiveness here
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PPP Loan 2024
The Paycheck Protection Program started during the pandemic to support small businesses and the borrowers can later get the loan forgiven if they follow the PPP forgiveness rules. The SBA-backed program ended on 31 May 2021 to process the loans to small businesses.
According to reports, around 96% of PPP loans are forgiven and some borrowers choose to pay their loans to avoid government audits. Regardless, the borrowers can apply for PPP loan forgiveness if they fulfill the eligibility and follow the loan forgiveness rules.
For 2024, the US SBA has accepted the application for PPP loan forgiveness from 13 March 2024 on SBA Direct’s forgiveness portal, the PPP borrowers can still apply if they have used all the loan proceedings depending on the coverage period.
The SBA has a 60-day exception period for the defaulted PPP borrowers with loans under $100,000, which ends on 03 March 2024 and ensures the borrowers are aware of the loan forgiveness application.
PPP Loan Forgiveness Rules 2024
The PPP borrowers who used their funding for any of the spending criteria below can receive the PPP Loan forgiveness:
- Payroll: When the small business entity uses the fund to pay salaries, PTO, and other employee benefits. If you use 60% of the fund on the payroll, you may be eligible for full loan forgiveness.
- Rent: When you use the funds to pay the rent, it is only possible when you sign the lease before 15 Feb 2020.
- Mortgage interest: The borrowers who signed the mortgage before 15 Feb 2020 can use the fund to pay the mortgage interest.
- Utilities: As per the CARES Act, you can spend the funds for utilities like water bills, phone services, electricity bills, and so on if your services begin before 15 Feb 2020.
The Borrowers can apply for PPP loan forgiveness during certain conditions:
- When you have used all the loan proceeds/funds you are requesting forgiveness.
- You should apply for loan forgiveness within 10 months of the last day of the coverage period (8-24 weeks). If you do not apply for forgiveness within the given time you may have to start making loan repayment to the lender.
- You can apply for loan forgiveness at any time within five years of SBA issuing your SBA loan number.
Who qualifies for the PPP loan 2024 forgiveness?
The PPP borrowers become eligible for the PPP loan forgiveness when they meet the following requirements:
- You can apply for loan forgiveness despite the size of the loan, however, the loan forgiveness size depends on many things.
- You have used the fund for eligible payroll costs, rent, business mortgage interests, or utilities during the coverage period, 8 to 24 weeks of the loan disbursement.
Documents Required for the PPP Loan Forgiveness Application
The PPP borrowers would need to present the following supporting documents to claim the PPP loan forgiveness:
For Payroll spending:
- Bank account statements or third-party payroll service reports on the amount of ash compensation paid to the employees
- Tax forms (form 941) for the period that overlaps the coverage period, the alternative payroll covered period, or the quarterly business report with employees’ wage reporting and other business reports relevant to the state.
- The payment receipts, canceled checks, or account statements validate employers’ contributions to an employee’s retirement plans, health benefits, etc.
For non-payroll spending:
- For business rent or lease payment: You may need business lease agreement copies and receipts of paying rents.
- Utility payments: You may need to present the bills & invoices or account statements.
- Mortgage interest: You may need to present a lender authorization schedule and receipts that validate payments.
How to apply for PPP loan 2024 Forgiveness?
PPP borrowers can apply for PPP loan forgiveness through the SBA direct forgiveness portal via form SBA Form 3508, SBA Form 3508EZ, or SBA Form 3508S. The borrowers can choose the form based on their loan amount, such as:
- $150,000 loans or below you may need to apply for forgiveness via SBA Form 3508S. With the SBA Form 3508S, the borrowers do not need to present additional documents except the relevant documentation to review the loan and audit process.
- For loans over $150,000, the borrowers should go with Fom SBA 3508 pr #508EZ as it requires additional documents with your application about your spending.
Now, the borrowers should follow the below steps to complete their PPP loan forgiveness application:
- After you are sure of which form to use, you should calculate the eligible payroll costs and non-payroll costs.
- Next, fill out the application form on the forgiveness portal.
- Next, prepare the documents needed with the PPP loan forgiveness application and apply on the portal.
- After reviewing your application, you will be notified if the authority needs additional information.
The borrowers can also apply for the PPP loan forgiveness through their lenders and wait for the lender review and finally the decision on the forgiveness.
How to check the status of PPP loan 2024 forgiveness?
The PPP borrowers who have applied for the PPP loan Forgiveness can check their status of application through the following ways:
- SBA Direct forgiveness portal: When borrowers who have applied through the portal can use the portal to check the status of their application and decision on loan forgiveness.
- Lender: If you have applied through your lender, you can inquire about the status and progress of the application with your lender only.
The PPP borrowers can apply for loan forgiveness at any time up to the maturity of the loan, within 10 months after the coverage period, so check your eligibility and loan coverage period to see if you can apply for the forgiveness.
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