Why You Should Apply for PPP Forgiveness Now

If you can believe it, we’ve been living with PPP for more than a year. The SBA program helped millions of businesses get through the worst of the pandemic, including nearly 24,000 Pinnacle clients.

Now many are turning their attention to forgiveness.

Early in the process, the advice was to wait on forgiveness. The program rules were changing often, and experts believed they would get easier for businesses that took smaller loans. That turned out to be true.

Now there’s no more reason to wait. For anyone who received a first-round PPP loan, it’s time to apply for forgiveness so you don’t have to pay it back. Here’s why.

Deadlines are approaching.
The PPP rules say your deadline to apply is 10 months after the end of your covered period, which is the amount of time you took to spend the funds. After that deadline, you have to start making payments to the bank, and the bank is required to report it to the SBA.

The rules leave a lot of room for interpretation, though. The covered period can be any amount of time between eight and 24 weeks, and you won’t declare how long yours is until you apply for forgiveness. That means your forgiveness deadline is tough to determine down to the day until you actually apply for forgiveness.

We do know, however, that for those who received early first-round PPP loans, which is almost all of them, August is 10 months after the end of a 24-week covered period. To avoid any confusion over deadlines and to prevent exceeding a payment due date, it’s best to apply for forgiveness now.

The application is as simple as it’s going to get.
As it stands now, any PPP loan of $150,000 or less can use the simplified forgiveness application called 3508S. This application has a few questions, a few certifications and may require you to upload a few documents. It does not require complex calculations, and it only allows for one possible reduction in your forgiveness amount—an EIDL advance. If you didn’t take an EIDL advance and your forgiveness application is approved, you will automatically get full forgiveness.

If your loan was more than $150,000, you will use either the 3508EZ or full 3508 application. The vast majority will be eligible for the EZ, which is also very simple, though it does require you to complete and submit a calculator. Very few will use the full application. Find out which application you will use at PNFP.com/PPPForgiveness

Forgiveness will get the PPP behind you and help you move on post-pandemic.
PPP was a life saver for many businesses during the pandemic. Now that we’re moving quickly toward post-pandemic life, it’s time to get your PPP loan off the books so you can get back to normal business. While the terms are more favorable than traditional lending, you don’t want to risk having to pay off another loan over the next two years when the government is offering to pay all or most of it for you. Take advantage of the opportunity to have it forgiven so you can move on.

If you took a PPP loan with Pinnacle, you can visit PNFP.com/PPPForgiveness to get started on your application right now. If you have any questions along the way, your financial advisor can help.

As a reminder, the certifications as well as the burden to show eligibility and entitlement to forgiveness falls solely on the borrower and the owners thereof per the CARES Act, rules and guidance issued thereunder, the applications, and our loan docs., as do the significant penalties if any issues arise with regard to a borrower’s participation in the PPP program.  Accordingly, we encourage you to review the PPP rules and regulations on the Treasury website.  Additionally, the tax rulings on forgiveness, including announcement 2020-12,  are included on the IRS website.

Legal Disclaimer: The information provided herein does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. Information contained herein is subject to change and may not constitute the most up-to-date information. It is recommended that you contact your attorney to obtain advice with respect to any particular legal matter, and you should not act or refrain from acting on the basis of information contained herein without first seeking advice from your attorney. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. All liability with respect to actions taken or not taken based on the contents hereof are hereby expressly disclaimed. The content herein is provided "as is;" no representations are made that the content is error-free.

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