PPP Loans One Step Closer to Being Forgiven

WASHINGTON, DC – As small businesses and agricultural operations continue to struggle with the effects of a global economic shutdown, those who accepted loans through the government’s Paycheck Protection Program (PPP) have been waiting for weeks to hear whether those loans would be forgiven. Initiated by the Small Business Administration (SBA), and funded through the Congressional CARES Act, business owners were told that if the funds were used to retain employees and pay for some other operating costs (like lease payments and utility expenses), their loan would be converted to a grant and would not require repayment. Two months after many borrowers applied for forgiveness, the SBA last week finally announced some new provisions for the program. Guidelines released by the SBA in a two-page forgiveness application, indicate that those who borrowed $50,000 or less will see their loans forgiven. Though this represents just 9 percent of all PPP loan dollars, it does cover well over 60 percent of all the PPP borrowers. Since launching the loan forgiveness project back in August, the Wall Street Journal says the SBA received almost 100,000 applications from banks seeking to convert the loans to grants. Without forgiveness, banks – including those in rural communities – will take on the responsibility of collecting on the loans over at least a two-year period. Roughly $130 billion remains in the PPP account, which – if directed by Treasury Secretary Steven Mnuchin – could be utilized in a second wave of PPP loans in the next few months.
(SOURCE: All Ag News)