B E N C H M A R K I N T E R N AT I O N A L
PPP LOAN FORGIVENESS
BENCH MAR K
IN T E RN AT I O N A L
PPP LOA N FORGIV ENE S S A PPP loan refers to the Paycheck Protection Program, a US federal government business loan program that was created in 2020 as part of the country’s Coronavirus Aid, Relief, and Economic Security Act. This program ended on the 31st May 2021.
MUST PPP LOANS BE REPAID?
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PPP Loans should technically be repaid. However, it is also possible to apply for loan forgiveness, which, if granted, means that the loan does not have to be paid back.
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PPP Loan forgiveness may be granted for businesses that maintained their employee and compensation levels during the 8-24 week period following the loan. Using a minimum of 60% of the loan for payroll is another consideration for forgiveness, and anything that was not spent on payroll must be used for other eligible expenses.
FURTHER CRITERIA Furthermore, as the program was specifically targeted at self-employed persons and businesses with the most need, it must be determined whether the loans issued were ‘necessary’, while bearing the following in mind: • Borrowers who received under $2,000,000 from the program are exempt from this ‘necessary’ criteria
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• Those who received a loan above this amount that is not deemed necessary will be forced to repay, but won’t face criminal exposure or a penalty
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For further information about PPP loans, visit the Benchmark International blog.