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  • Allen Bromberger

PPP Loan Forgiveness—Don’t Worry Now, but Maybe Later

As many know, in the early half of 2020, the federal government issued nearly 5 million forgivable loans, spending more than $520 billion on businesses under 500 employees affected by the COVID crisis. Known as Payroll Protection Program (PPP) loans, these were made through approved private SBA lenders, guaranteed by the U.S. Government, and are to be forgiven if the proceeds have been used for payroll and other approved costs within a certain amount of time. Everywhere, business owners that received and spent their PPP loans are eagerly awaiting the chance to have those loans forgiven as promised.

However, the mechanisms to do so have not yet been put into place. In other words, if you haven’t applied for forgiveness yet, don’t worry. You haven’t missed anything, and you are not alone.


The reasons for the delay are several. First, it took months for the S.B.A. to develop a form that could be used to apply for forgiveness. Of course, it was a paper form that had to be converted to a digital format, and that took time. The banks were then allowed to add their own procedures and requirements for forgiveness (technically, they are the lenders and the US government is just a guarantor), which added further delay—in most cases, that process is not yet complete.


Adding to the confusion, the U.S. Congress recently indicated that it intends to change the rules on forgiveness, possibly streamlining the process and the information that would be required of borrowers. That legislation is currently pending.


Finally, the S.B.A. and lenders decided that it would help to have an online portal that could handle and track all the applications electronically. Good idea, but it is still under development. The bottom line is that in nearly all cases, borrowers are left waiting for these issues to be resolved.


The good news is that the loans are not due for two years, so there is no rush for many. For others (I had a corporate merger held up over responsibility for a large PPP loan), so indemnities and undertakings may be required. Hopefully, the forgiveness process will be accessible when they finally announce it. Stay tuned for additional news as we get it.


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