A borrower may select a covered period between 8 weeks and 24 weeks, which commences upon disbursement of the PPP loan proceeds. The flexibility on the part of a borrower to choose a particular covered period within that range was a feature added pursuant to the Economic Aid Act.
Similarly one may ask, do I have to wait 24 weeks for PPP forgiveness?
Borrowers may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from loan origination.
Beside this, does PPP have to be spent in 8 weeks?
Borrowers are no longer locked into the eight weeks. The PPP Flexibility Act states that borrowers with loan numbers after June 5, 2020, automatically have the forgiveness period of 24 weeks or until December 31, 2020. At first, having more time to spend your loan proceeds seems to make more sense.
How do I pay myself with PPP?
The first day of the Covered Period must be the same as the PPP Loan Disbursement Date. For example, if the Borrower received its PPP loan proceeds on Monday, April 20, the first day of the Covered Period is April 20 and the last day of the Covered Period is Sunday, June 14.
Lenders have up to 60 days from the time they receive the loan forgiveness application to make a decision. Leftover PPP funds not spent during the covered period are not eligible for forgiveness. Borrowers will have to repay the remaining funds to their lenders at 1% interest with a 5-year term.
The covered period is the period beginning on the date the lender disburses the PPP loan and ending on the date selected by the borrower that is at least 8 weeks following the date of loan disbursement and not more than 24 weeks after the date of loan disbursement (the “Covered Period”).
What can independent contractors spend their PPP loan on?
- Mortgage, rent, and utility payments.
- Interest payments on debts incurred before February 15, 2020.
- Refinancing an EIDL loan from the SBA made between January 31, 2020 and April 3, 2020.
There was nothing in the law that said business owners could elect a shorter forgiveness period (say, 12 weeks) if they ran out of funds before 24 weeks. … In other words, the forgiveness amount will be reduced as if the salary reduction were in effect for the remainder of the covered period.
The Covered Period is either (1) the 24-week (168-day) period beginning on the PPP loan disbursement date, or (2) if the borrower received its PPP loan before June 5, 2020, the borrower may elect to use an eight-week (56-day) Covered Period. In no event may the Covered Period extend beyond December 31, 2020.
Answer: The eight-week period begins on the date the lender makes the first disbursement of the PPP loan to the borrower. The lender must make the first disbursement of the loan no later than ten calendar days from the date of loan approval.