Small business owners are encouraged to apply for forgiveness as soon as they have exhausted their loan funds
Washington, D.C.—The U.S. Department of Treasury issued a new rule last night specifying that small business owners who have received a Paycheck Protection Program (PPP) loan can submit a loan forgiveness application immediately after they have spent the funds.
At a Small Business Committee hearing earlier this month, U.S. Senator Susan Collins, the co-author of the PPP, had asked Treasury Secretary Steven Mnuchin whether small businesses must wait for the end of the 24-week duration of the loans to seek loan forgiveness. A number of business owners have expressed confusion about when to apply. This new rule clarifies that borrowers can apply for loan forgiveness at any point after they have used all funds for which they are seeking loan forgiveness.
“Some small businesses have spent their PPP funds, have reopened, and are ready to seek loan forgiveness. I am pleased that the Treasury Department listened to small business owners’ feedback and is giving them the option to apply for loan forgiveness as soon as possible,” said Senator Collins. “This new rule will help prevent small business owners from experiencing uncertainty while waiting for their loans to be processed and will help to more evenly distribute the workload for banks and the Small Business Administration as they close out these PPP loans.”
The PPP was authored by Senator Collins along with Senators Marco Rubio (R-FL), Ben Cardin (D-MD), and Jeanne Shaheen (D-NH) and signed into law as part of the CARES Act on March 27, 2020. The most recent U.S. Census survey shows 76% of Maine small businesses received funding through PPP, and the program is helping to sustain approximately 200,000 Maine jobs.