Small business owners who got a Paycheck Protection Program (P3) loan in 2020 should pay close attention to their forgiveness period as the window of time to avoid principal and interest payments is ending. . For example, if you got a P3 loan on April 15, 2020 and took the maximum coverage period of 24 weeks, you will have until August 30 to request a rebate. If you do not apply for the remission on time, you will be responsible for the monthly interest and principal payments on the loan. While you can always request a rebate later, you will make monthly payments of principal and interest until your rebate request is approved by the bank and the Small Business Association (SBA). The bank and the SBA have up to five months to approve your pardon request.
The SBA last reported in May that more than 70% of PPP loans made in 2020 had already been canceled. They also noted that over 1.7 million PPP loan borrowers had not even requested cancellation. If you’re a small business that hasn’t applied for your 2020 PPP loan forgiveness, you’ll want to act fast to avoid future monthly payments.