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Utah Life Sciences News & Events

SBA Extends PPP Loan Deferral, New Streamlined Forgiveness for Loans of $50,000 or Less

October 16, 2020

On October 7, the SBA released updated FAQs (question #52) to clarify that lenders must recognize the extended deferral period for payments on the principal, interest, and fees on all PPP loans, even if the initial loan terms indicates a six-month deferral (the initial period when the program was first enacted).

Under the Paycheck Protection Program Flexibility Act of 2020 passed in June, the deferral period for borrower payments on all PPP loans was extended to either the date that the SBA remits the borrower’s loan forgiveness amount to the lender, or if the borrower has not applied for loan forgiveness, the deferral period is extended to ten months after the end of the borrower’s covered period.

The extension of the deferral period under the PPP Flexibility Act automatically applies to all PPP loans. There is no requirement of formal modification of the promissory note.

In other action, on October 8, the SBA in consultation with the Treasury Department, released a simpler loan forgiveness application  or PPP loans of $50,000 or less. Legislation pending before Congress, including a bill introduced by Utah Representative John Curtis (UT-3), would provide automatic loan forgiveness for loans of $150,000 or less.