Impending Paycheck Protection Program Forgiveness Terms & Timing Changes

Cheryl Kardos

Cheryl Kardos

May 29, 2020


Monday, June 1st is a date that has been ingrained in every PPP lender’s minds the last several weeks. This is the date when the PPP loans that were originated on the first day of the program would hit the 8-week covered period mark and be up for forgiveness—at least as outlined by the original legislation.

However, we sit here on the Friday before June 1 with some key PPP guidance for lenders still unknown—such as how to send forgiveness decisions to the SBA, and whether or not Form 3508 will change.

In addition to those unknowns, legislation with bipartisan support is moving through Congress that is set to change key terms and timing of forgiveness for borrowers and lenders. 

Proposed Program & Timing Changes in Congress

Yesterday the House passed a bill that aims to provide businesses with more flexibility for using PPP relief funds. Key changes to the forgiveness program in the bill include:

  • A reduction in the share of funds that is required to be used for payroll 
  • An extension to the covered period for use of funds
  • An extension to the deadlines to rehire workers
  • An increase in duration of PPP loans

The legislation is expected to be taken up next week by the Senate, where it has bipartisan support. However, it could face changes as Small Business Committee Chairman Marco Rubio has stated that some of the bill’s provisions “could create an unintended disincentive to rehiring.” 

So, what are lenders to do on June 1?

Our Recommendation for Lenders

While Numerated’s platform is ready to accept forgiveness applications next week, our perspective is that there is a high likelihood that changes will occur to the forgiveness program that will impact the forgiveness process. 

Our perspective is consistent with the recommendation of the primary SBA lender trade association, which recommends lenders not accept forgiveness applications until July. 

If lenders do choose to accept applications for forgiveness next week, they should be aware that they may need to cancel and re-enter the applications once there is more program clarity. 

We'll Share More During 3 Webinars Next Week 

In light of all the ensuing program changes, we want to ensure we are available to answer questions, share perspectives on SBA guidance, and highlight any platform and product changes we’ll be making as a result. 

Next week we will host three 30-minute webinar sessions, which are open to both Numerated customers and other lenders who are looking for perspectives on PPP or still evaluating forgiveness solutions: 

  • Q&A Sessions. Here we will offer perspectives on the latest program guidance, and provide an open forum to answer questions on both the program and our platform. Monday, 6/1 at 2pm ET and Wednesday, 6/3 at 3pm ET. Register here.
  • Product Demo Session. Here we will focus more specifically on our forgiveness solution, including demoing enhanced features, answering common product questions, and providing lenders with the opportunity to share product feedback. Friday, 6/5 at 1pm ET. Register here.

In Monday’s Q&A session we will share more on our perspectives around the impending forgiveness program changes, which we will of course configure our platform rapidly to support should they go into effect.

We hope to see you there! In the meantime, check out the innovation we've brought to the SBA's forgiveness application, and as always, please reach out to us for more information about how we can help your bank or credit union with PPP and beyond. 

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