- Clarification on Paycheck Protection Program forgiveness likely to arrive after latest round of COVID-19 legislation
- Accountants urge borrowers not to rush applications for PPP forgiveness due to dynamic situation
- Watch out for the 10-month mark, when the loan can no longer be forgiven
Businesses that borrowed funds under the Paycheck Protection Program should be patient about applying for forgiveness of the loan, according to a professional organization of certified public accountants. The group counseled that since the situation is dynamic, with several outstanding questions unlikely to be resolved until after the next round of COVID-19 relief, borrowers shouldn’t try to rush the process.
The American Institute of Certified Public Accountants said the U.S. Small Business Administration and Treasury Department are expected to release a series of FAQs to clarify PPP-related issues, such as exceptions to the requirement that a borrowing company maintain its full-time equivalent employee levels. Congress is also working to pass a second relief package before recessing on Aug. 8, and the legislation may include significant changes on forgiveness requirements.
The AICPA says borrowers should be aware of a 10-month deadline, when a forgiveness application is due and a loan must be repaid if none has been received. The organization says that since payments aren’t due until that point, there is less urgency to seek forgiveness and it is more important to wait until unanswered questions about PPP are resolved.
