SBA PPP Forgiveness and Defaults

Forgiveness
SBA is currently offering defaulted Paycheck Protection Program (PPP) borrowers a goodwill exception period for those who have not applied for loan forgiveness. The deadline to apply is March 3, 2024.

https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program/ppp-loan-forgiveness

Defaults
The U.S. Small Business Administration will begin referring defaulted Paycheck Protection Program loans under $100K to the U.S. Treasury Department and the Internal Revenue Service for collection on March 4, 2024.

What does this mean?
Small business borrowers who are referred to Treasury and IRS for collection may face significant consequences, including:

• Negative impact on credit scores
• Withholding of future state and federal tax refunds and any potential federal government funding (such as social security); and
• Referral of your loan to private debt collectors to pursue repayment, who may use tactics like wage garnishment.

What can borrowers do?
Borrowers who used PPP funds for eligible expenses can apply for forgiveness. Follow the instructions located at www.sba.gov/PPPForgiveness to complete your PPP forgiveness application by March 3, 2024. There is no cost to apply, and it takes most borrowers less than 15 minutes complete the application.

Depending on their PPP lender, borrowers may submit a forgiveness application either directly to the SBA or through their lender. A step-by-step guide to use the portal can be found here. A step-by-step guide to use the portal can be found here.

Questions?
PPP Direct Forgiveness Borrower portal video guide.
Applicants eligible for direct forgiveness may contact SBA at 877-552-2692.
For applicants not eligible for direct forgiveness, please contact your PPP lender.
For additional questions, please contact your local SBA District Office. To locate your office, visit www.sba.gov/local-assistance.