PPP Loan Forgiveness: Patience is a Virtue

Please note: This blog is current to the date of its publication, Monday, August 3. For additional updates or assistance navigating these uncertain times, please contact us or visit our SST COVID-19 resource page.


Many recipients of Paycheck Protection Program (PPP) loans have expended funds on eligible costs and are ready to take the next steps toward applying for loan forgiveness. However, in this post, we’ll explore how it might just pay off to wait to apply.

While Congress is discussing additional funding, the Small Business Administration (SBA) is working to streamline the loan forgiveness application process, and both developments could significantly affect how loan recipients move forward IF implemented. Some considerations include:

  • A second round of PPP funding may be specifically targeted to companies and organizations with 300 or less employees and 50% lost revenue
  • Automatic forgiveness may be granted for PPP loans less than $150,000
  • Interim forgiveness may be granted for PPP loans less than $1 million

Most lenders are not ready to process loan forgiveness applications and are still waiting on additional guidance from the SBA. Once this guidance is issued, we expect updated calculators and tools including:

  • Revised SBA loan forgiveness application (to reflect Aug. 8 program extension)
  • Loan forgiveness calculation tools from organizations like the AICPA, CPA.com and biz2credit
  • Documentation requirements
  • Customized payroll reports by third-party payroll providers

While many nonprofit organizations and small businesses are ready to forge ahead, there is no rush to apply for PPP loan forgiveness, as borrowers are not required to make any loan payments until 10 months after the last day of the covered period.

In the meantime, SST recommends focusing on maximizing loan forgiveness by evaluating the covered period (8 weeks vs. 24 weeks), documenting how loan proceeds were spent and planning for the future by preparing a strategic scenario plan to identify critical uncertainties.

It is also important to identify ways to improve your bottom line and cash flow by evaluating financing options, communicating with vendors for discounts or delayed payments, postponing capital improvements or outsourcing operational functions such as marketing, technology and accounting.

Thanks to SST Partner Emily Cook for providing the content of this post. Click here to learn more about Emily.