With the extended PPP loan application deadline behind us, many borrowers are anxious to start their loan forgiveness application to ensure that their loan funds are forgiven. Currently, borrowers have until 10 months after the end of the loan’s covered period to apply for forgiveness. At that point, if forgiveness forms have not been submitted, any borrowed funds officially become a loan that needs to be repaid.

However, experts are saying it may be beneficial to wait to apply for forgiveness. Below are five reasons not to rush your PPP loan forgiveness application:

1. Additional relief is anticipated.
   Congress is currently debating a much-anticipated new round of COVID-19 relief, which is expected to include a second round of PPP loans available to borrowers that need further assistance in light of the ongoing pandemic. This will likely impact the forgiveness application deadline for existing borrowers who choose to apply for a second round of funding.
   
   
2. Possible changes to forgiveness requirements.
   Experts anticipate that the new legislation from Congress will include major changes to the structure of the PPP forgiveness requirements, likely making the requirements more relaxed for borrowers with loans under $100,000 or $150,000.
   
   
3. Delays from the SBA.
   The SBA recently issued a procedural notice that indicated that it would not begin accepting PPP forgiveness applications until a new software platform that they are working on goes live. The software was anticipated to go live this week, however the SBA warned that the launch could be delayed as they wait to learn how new legislation from Congress would impact the PPP forgiveness process.
   
   
4. Many lenders are not ready to process forgiveness applications.
   At this point, most lending institutions are not yet ready to process PPP forgiveness applications. Many are developing automated technology tools to assist in the application process, which they are unable to finalize until final guidance from Congress and the SBA is issued.
   
   
5. Additional time to organize payroll documentation.
   One of the most significant criteria for PPP forgiveness eligibility is use of funds for payroll costs. Many payroll providers are currently developing custom payroll reports that specifically comply with PPP, however, like lending institutions, they can’t finalize these programs until final guidance from Congress and the SBA is issued.

While it may be best to wait for final program guidance to start the forgiveness application process, borrowers can best utilize this interim period to maximize forgiveness eligibility by documenting how loan proceeds are used and gathering any supporting documents.

If you have questions about PPP loan forgiveness, leave a comment below, or feel free to contact me directly. You can also visit our COVID-19 Resource Center for the latest updates on the PPP and other COVID-19 alerts and impacts.