Quick Answer: What Is The Difference Between The 8 Week And 24 Week PPP?

Can I use less than 24 weeks for PPP forgiveness?

This is welcome news for many who were going to spend their entire Paycheck Protection Program (“PPP”) loan after the eight-week period, but well before the end of the 24-week period.

A company that spent all of its PPP monies by week 10 will not have to wait another 14 weeks to apply for forgiveness..

Should I use 8 weeks or 24 weeks for my PPP loan covered period?

If your business remained opened during the course of the pandemic and is eligible to use the eight-week covered period for your loan forgiveness, this could be the most beneficial option for you.

Will the PPP loan be forgiven?

PPP loan borrowers are being steered toward forgiveness. … The CARES Act established the Paycheck Protection Program for small businesses experiencing difficulties amid the coronavirus. Generally, the loans are forgivable if at least 60% of the proceeds go to payroll expenses.

What happens after the 8 weeks of PPP?

At the end of the 8-week period from your first receipt of PPP loan funds, you will be able to submit an application to your lender seeking forgiveness of potentially your entire PPP loan balance. That forgiveness will take the form of the SBA’s payment of your loan.

When can I apply PPP forgiveness?

The SBA has not set a deadline to apply for forgiveness, but you have 10 months after the end of your covered period before you’ll be required to start making monthly payments.

What is PPP loan forgiveness?

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses. PPP loans have an interest rate of 1%.

What is the 24 week period for PPP?

If 24 weeks, it begins on the date the loan proceeds are disbursed and ends 24 weeks (168 days) from that date. Alternative Period – Borrowers with a bi-weekly or more frequent payroll schedule may elect the Alternative Period.

Do PPP loans have to be used in 8 weeks?

The Paycheck Protection Program Flexibility Act made some significant changes to PPP loans. One of the biggest changes was to the eight-week forgiveness period. If you were assigned a PPP loan number on or before June 5, 2020, you now have the option of taking 24 weeks to spend the funds instead of eight weeks.

How can I get my PPP forgiven?

Use the following tips on how to make sure your PPP loan is forgiven to get started:Use it for eligible expenses.Keep your employee headcount up.Don’t reduce an employee’s wages by more than 25%Document everything.Talk with your lender.Apply for loan forgiveness.

What are the new rules for PPP loan forgiveness?

First, PPP borrowers with loan amounts up to $150,000 may obtain loan forgiveness by submitting a one-page certification to their lenders that describes the number of employees retained due to the loan, estimates the total amount of the loan spent on payroll costs, and states the total loan amount.

Should I apply for PPP loan forgiveness now or wait?

The PPP borrower is not required to file for forgiveness until the expiration of 10 months after the end date of their Covered Period — most borrowers likely choose the 24-week period — which is also the timeline for deferral of loan payments.

What documents do I need for PPP loan forgiveness?

For the payroll portion of your PPP loan, you will need to provide documents from your payroll provider and proof of paying employment taxes with IRS and state forms. Eligible payroll costs include salaries and wages, health benefits, and paid leave (i.e. vacation, parental, family, medical, or sick leave).

Is PPP forgiveness 8 weeks or 24 weeks?

And once you apply for forgiveness, any payments are paused until the SBA makes a forgiveness decision about your loan. There are three PPP covered periods: 8-week covered period: If you received your PPP loan before June 5, 2020, you can choose between an 8-week or 24-week covered period.

When should you apply for PPP forgiveness?

You must apply for forgiveness within 10 months after the end of the ‘Covered Period. ‘ which is the 24-week period that starts when you received your PPP loan. The lender (i.e. your bank) has 2 months to process your loan forgiveness application then SBA has three additional months to approve your forgiveness.

Are payroll taxes included in PPP loan forgiveness?

Federal employment taxes paid by the employer are not included in Payroll Costs to calculate the loan forgiveness amount.