Forgiveness
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on payroll through these unprecedented times. The SBA will convert all or a portion of these loans into grants, essentially forgiving the loan, if the funds are used for eligible expenses.
Covered period
The covered period is the 24-week (previously 8-week) period, beginning on the date funds were disbursed by the direct lender, that you, the borrower, are eligible to spend PPP funds.
Deferral period
During the deferral period, you are not required to make any payments of principal, interest, or fees on the PPP loan you received for your business, provided that the SBA does not determine that the loan is not eligible for forgiveness (in whole or in part) during that time. The deferral period includes the covered period and a limited time after the covered period ends.
Repayment
If you are not eligible for loan forgiveness (in whole or in part), you will eventually begin making monthly repayments that will begin the following full month after receiving a decision from the SBA or at the end of your deferral period, depending on whether or not you take action and apply for forgiveness.
Loan maturity
Loan maturity refers to the end of the PPP repayment period whether or not the payments were successful. Check your promissory note to determine whether you have a 2-year or a 5-year maturity period. Due to the SBA’s dynamic guidelines, if you originally had a 2-year maturity period, you should have received an email from us offering you the option to either remain on this repayment schedule, or opt into a 5-year maturity.
We are continuously updating this information, however, in the event of inconsistencies with the SBA, please follow official SBA guidance. Congress, the U.S. Treasury, and the SBA have been continually modifying the PPP guidelines since the program started. PPP borrowers are encouraged to visit the U.S. Treasury and SBA websites for the most current information on the PPP guidelines and to watch for applicable updates.