Until now over $511 billion has been distributed among different small business owners according to SBA. According to SBA, there are still $138 billion in appropriate funds that are yet to be deployed under PPP loans. There is a huge number of applicants who applied for PPP loans under $100,000.
The best feature of PPP loans is that the whole amount is forgivable if you used it in the right way. The U.S government released Loan forgiveness applications for PPP on 15th May 2020. After a week, they issued some additional comments to clarify the terms and conditions of loan forgiveness.
How the Forgiveness Application will work
Everyone who wants loan forgiveness will have to apply through a proper application. Then SBA will review each PPP loan forgiveness application individually. All applications will be treated equally regardless of the loan size.
There are a couple of things that SBA will review
- Eligibility of the borrower
SBA will need proper proof that are you eligible for the loan forgiveness or not. Your loan application and certification will be reviewed thoroughly. If your loan amount is less than 2 million dollars, then SBA will review your economic necessities. This point was given in May 23 guidelines.
- How you use the loan amount
This is another crucial point. SBA will calculate the loan amount correctly and will check that you used it for business purposes or your own.
- The total amount of loan forgiveness
After checking all your background, the SBA will decide whether you are entitled to the loan forgiveness or not. This will also depend on your loan amount.
- What will bank review in forgiveness
The loan is given by different banks so there are some points that banks also must verify which are following.
- The proper certifications are being used in loan forgiveness applications.
- You must provide documents that will verify your all costs including payroll and non-payrolls.
- The total amount of loans must equal the amount of cost in payroll and non-payroll. This will be determined by a third-party payroll processor.
Now, if your forgiveness application is rejected you can Question SBA about it. If you are considering non-eligible for the forgiveness the SBA will ask banks to reach you in writing or contact, you over the phone for additional information. After getting additional information if the bank considers you eligible your loan will be forgiven otherwise you have to pay up.
If you think that the bank is making a mistake by declaring you ineligible than you can appeal to SBA within 30 days. SBA will issue more guidance to you in that process.
Best ways to apply for PPP loans and its forgiveness
The best way to apply for the remaining PPP loan funds is through any online SBA lenders like BitX funding. They have partnered with BlueVine which has the fastest rate of feedback on the PPP loan applications.