As the COVID-19 pandemic forced a temporary, and in some cases permanent re-wiring of many parts of the U.S. economy, Congress passed the CARES Act, which included a whole host of provisions targeted at delivering much-needed relief for business owners feeling the jolt of lockdowns, mask mandates, and lost business. One of the Act’s most effective provisions was the Paycheck Protection Program (“PPP”), which provided over $798 billion in the form of loans targeted at keeping workers on payroll.
The Small Business Administration (“SBA”) and lenders have originated 11.7 million loans for 8.5 million small businesses. In 2021 alone, the SBA has approved over 6.5 million loans totaling $275 billion, with the average loan amount being $42,000. 96% of loans originated thus far in 2021 have gone to businesses with fewer than 20 employees (up from 87% in 2020).
One aspect of the program that is developing is loan forgiveness, for which businesses may apply if they meet certain conditions. To facilitate speedy and efficient loan forgiveness, the SBA is launching a new online portal for loans totaling $150,000 or less that allows businesses to apply for forgiveness directly to the SBA. Approximately 6.5 million small businesses will qualify to direct forgiveness, and the SBA begins accepting applications on August 4, 2021. Businesses will have to opt in to the program, and over 600 banks have partnered with the SBA – meaning that 2.17 million small businesses already qualify to use the portal. This represents 1 in 3 PPP loans of less than $150,000 that have not yet applied for forgiveness. For advice and guidance in going through the PPP loan forgiveness process, DBL Law is primed and ready to deliver tailored counsel.