The Small Business Administration is providing a loan forgiveness deadline for Disaster Loan (EIDL) and Paycheck Protection Program (PPP) loans. The forgiveness applies to loans under $100,000 in an effort to support the stability and recover of small businesses navigating the post-pandemic landscape.
Exception Period
The 60-day exception period is set to end March 3, 2024. COVID EIDL borrowers can decide repayment options, including hardship repayment plans that can reduce their monthly installments down to $25. PPP borrowers can utilize this time to apply for loan forgiveness.
If your small business has met the payroll requirements, you can complete the PPP loan forgiveness application before the deadline. Instructions are available on the SBA website where you can also log into your loan portal. To have qualified loans forgiven, PPP borrowers need to have qualified loans that demonstrates the borrowed money was used for employee payroll.
What The Small Business Forgiveness Deadline Means For Businesses
The March 2024 goodwill period is a lifeline for those holding EIDL or PPP loans. It offers the opportunity to avoid defaulting without the immediate burden of repayment. No small business wants to have to default on a loan. Doing so decreases their long-term financial prospects. Not to mention, taking a hit on their credit scores and being an unlikely candidate for future government financial aid.
Unfortunately, repayment for COVID EIDL borrowers is mandatory. However, the SBA offers support through hardship accommodation plans, which can significantly lower initial monthly payments.
You may also enjoy reading: What Is IRS Form 8995, Qualified Business Income Deduction?
