We have good news: Halloween won’t be as scary as originally thought for the millions of small businesses that took out Paycheck Protection Program (PPP) loans of $50,000 or less. The U.S. Small Business Administration (SBA) has confirmed that the deadline for PPP loan forgiveness applications is not Oct. 31 as originally expected and will instead depend on loan maturity dates.
Through clarification on the SBA’s website, the agency states that the deadline for submitting a loan forgiveness application is the maturity date for the loan, which may be either two or five years from the loan origination date as specified by the terms of the loan agreement. This means businesses have more time to apply for forgiveness with their lenders.
That doesn’t mean borrowers don’t have to pay during the two-year or five-year term though. According to our Denver Metro Small Business Development Center (SBDC), here are some things for PPP recipients to consider:
- Borrowers have until the final maturity date to request forgiveness; they will be required to begin payments on the loan within 10 months of the last day of the covered loan forgiveness period.
- During that interim 10-month period and while a business waits for acceptance of the application for forgiveness, businesses will not have to make payments on the loan.
- Businesses can still apply for forgiveness after the grace period and until the final term of the loan.
- Businesses that still have an open loan extending beyond the grace period should expect to make monthly loan payments until the loan is closed or forgiveness has been confirmed by their lenders.
Here’s an example of how PPP loan forgiveness will work:
PPP Loan Origination Date: June 25, 2020
24-Week Covered Period Ends: Dec. 10, 2020
10-Month Grace Period Ends: Oct. 10, 2021
Payments Initiated: Nov. 1, 2021
Loan Term: 60 Months (from Origination)
Loan Maturity Date/Forgiveness Deadline: June 25, 2025
We encourage you to contact your lender for more details. As always, our Denver Metro Small Business Development Center (SBDC) is ready to help get you answers for any questions you may have. Contact email@example.com or call 303-620-8076 to make an appointment.
Welcome SBDC Director China Califf
Speaking of our SBDC, we are excited to welcome the new Denver Metro SBDC Director China Califf to our Chamber family. Many of you may know China, because she has been working with small businesses and entrepreneurs for nearly two decades. She was with Colorado Lending Source for 17 years. Colorado Lending Source is a long-time partner of the SBDC, working with us on programs and events, including Trout Tank Pitch Competition, LEADING EDGE, SBDC Day, Ice House Entrepreneur Development Training and countless educational panels and event collaborations. We are thrilled to bring her passion for supporting small business to our team. Learn more about China.
State of Small Business Looks to Future Oct. 28
You will have the chance to “meet” China at our virtual 2020 State of Small Business on Oct. 28. We know this year has been hard – particularly for small businesses, and we hope this event gives you the inspiration to continue your work to rebuild our economy. We’ll hear from I-LEAD’s David Castro about how leaders can bring strength and resilience to their businesses and our community. One of those leaders is Giovanna Carriero-Contreras, CEO and founder of Cesco Linguistic Services. We’ll join the University of Colorado Denver Business School in honoring Giovanna with the 2020 Bill Daniels Ethical Leader of the Year, and we’ll hear an exclusive economic forecast for small businesses from Metro Denver Economic Development Corporation’s Consulting Chief Economist Patty Silverstein. Register today.
Complimentary Tickets to B:CIVIC Summit Available to Small Businesses
If you own or work for a small business, you know how committed small businesses throughout Colorado are to supporting their communities and you may be especially interested in the theme of this year’s B:CIVIC Summit. B:CIVIC, a Chamber family affiliate, will host its fifth annual B:CIVIC Summit on Oct. 22 with the goal to support leaders as they (re)define business for good for the next decade. What’s really special though is that 75 small businesses (under 100 employees) and minority-owned companies will have the opportunity to attend this year’s Summit for free, thanks to the generosity of Delta Dental of Colorado, PEAK Resources and Suncor Energy. We hope you all decide to join us at this event and of course, for those of you who qualify for the free attendance, you must register for the Summit by Oct. 20, using code “Bbiz1” for complimentary first-come, first-served registration. Learn more.
Kelly Brough is the president and CEO of the Denver Metro Chamber.