PPP Loan Repayment

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Richard Ramsey
PPP Loan Repayment

PPP loans have an interest rate of 1%. Loans issued prior to June 5, 2020, have a maturity of two years. ... If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower's loan forgiveness (between 8 and 24 weeks).

  1. Do PPP loans have to be repaid?
  2. When must PPP loans be repaid?
  3. Will PPP loans be automatically forgiven?
  4. How do I repay my SBA PPP loan?
  5. What are the rules for PPP loan forgiveness?
  6. What if my PPP loan is not forgiven?
  7. How do I calculate my PPP loan?
  8. What documents are needed for PPP loan forgiveness?
  9. Are PPP loans still available?

Do PPP loans have to be repaid?

Yes. PPP loans (the full principal amount and any accrued interest) may be fully forgiven, meaning they do not have to be repaid. If you do not apply for forgiveness, you will have to repay the loan.

When must PPP loans be repaid?

The entire loan is due in two years (if you were approved before June 5, 2020) or five years (if you were approved after June 5, 2020). In both cases, you can repay early without any prepayment penalties or fees.

Will PPP loans be automatically forgiven?

Most Paycheck Protection Program (“PPP”) borrowers are working toward full forgiveness of their PPP loans and are anxious to get this process started. A borrower generally may submit a loan forgiveness application any time on or before the maturity of the loan if the borrower has used all of the loan proceeds.

How do I repay my SBA PPP loan?

The website you can use to repay your EIDL loan can be found at Pay.gov. You must have your 10-digit loan number and a payment amount in order to pay it back. There is no prepayment penalty but it is possible a minimal amount of interest has accrued from the time the loan was disbursed.

What are the rules for PPP loan forgiveness?

In order to be forgiven, at least 60% of the loan amount needs to be used for payroll purposes. If less than 60% of your loan is used for payroll, you can still be eligible for forgiveness, with the amount you spend correlating directly to forgiveness.

What if my PPP loan is not forgiven?

Answer: If a PPP loan is not forgiven in full (including if there has been a reduction in the forgiveness amount for an EIDL advance), any remaining balance due on the PPP loan must be repaid by the borrower.

How do I calculate my PPP loan?

PPP loans are calculated using the average monthly cost of the salaries of you and your employees. If you're a sole proprietor or self-employed and file a Schedule C, your PPP loan is calculated based on your business' gross profit (or gross income). Your salary as an owner is defined by the way your business is taxed.

What documents are needed for PPP loan forgiveness?

Required documents for PPP loan forgiveness

  • Bank account statements.
  • Photo ID (e.g. driver's license, passport)
  • Your SBA loan number (can be found on your Promissory Note)

Are PPP loans still available?

“The P.P.P. general fund is closed to new applications.” Some money — around $8 billion — is still available through a set-aside for community financial institutions, which generally focus on lending to businesses run by women, minorities and other underserved communities.


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