PPP Forgiveness – Apply Now or Wait?

On September 10, 2020, the US Senate voted on an additional bill for coronavirus relief. It failed to pass the Senate. However, there is still optimism in Washington that an agreement on another relief package will be reached relatively soon.

Included in the failed bill were several key provisions regarding the Paycheck Protection Program (PPP), such as:

  • Simplified forgiveness application process for loans under $2 million
  • Provisions allowing additional types of expenses to be paid using PPP funds
  • Another round of PPP for qualifying organizations that saw revenue declines of 35% or more in the 1st or 2nd quarters of 2020 compared to the same quarters of 2019

While we understand it is frustrating to still have so much uncertainty surrounding this program after all these months, it continues to be our recommendation that a wait and see approach is best for now. Under the current rules, the deadline to apply for loan forgiveness is 10 months after the end of the covered period in which the funds are used. Applying for loan forgiveness under the current guidance is time consuming for both the borrowers and the CPAs assisting them. We expect if another relief bill does ultimately pass that the process for loan forgiveness for loans under $2 million will be much more simplified and will ultimately cost borrowers less. While there is still hope we get the needed reforms before the election, it appears more certain that we will get something meaningful after the election.

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About the Author: Shelly Spata, CPA

Shelly Spata joined the firm in 1998, and her name went on the door in 1999. She now serves as the Managing Partner of the firm. "As a business owner myself, I understand the complexities and challenges business owners face, and I strive to add value by helping clients understand their financial statements, manage tax consequences, and clearly see the financial and tax ramifications — both positive and negative — of decisions they make," she explains. "Without good financial information, it’s like driving a car blind, but with good information, clients are able to maximize profits."