SBA Further Clarifies Deferral of PPP Loan Repayments in FAQ 52

October 8, 2020

On October 7, the SBA released FAQ 52 to provide clarity regarding the deferral period for payments on Paycheck Protection Program (PPP) loans.

At the inception of the PPP, the deferral period could end after six months. With PPP loans funded as early as the first week of April, that six-month period would be ending now.

The FAQ reminds borrowers the Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act) extended the deferral period for borrower payments of principal, interest, and fees on all PPP loans to the date that the SBA remits the borrower’s loan forgiveness amount to the lender.

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 Flexibility Act automatically applies to all PPP loans. Lenders are required to give immediate effect to the statutory extension and should notify borrowers of the change to the deferral period. The SBA does not require a formal modification to the promissory note.

Preparing your PPP loan forgiveness application? Need assistance?

Consider working with an Aprio advisor. Our dedicated PPP team has been closely monitoring all updates from the SBA, IRS and the Fed. We’ve been working closely with both banks and businesses to facilitate loan forgiveness. Contact an Aprio Advisor for PPP loan forgiveness support or reach out to Aprio’s PPP loan forgiveness team.

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About the Author

Justin Elanjian

Justin Elanjian, CPA, is the Partner-in-Charge of Aprio’s Paycheck Protection Program (PPP) & Employee Retention Credit (ERC) Services. As a national PPP expert, prominent speaker and strategic business advisor, Justin helps both lenders and borrowers navigate the complexities of the PPP. He also helps his clients realize benefits from other stimulus package programs, such as the ERC, and is committed to strengthening his clients’ balance sheets and helping them achieve what’s next. Justin also leads a team of more than 50 professionals who share his passion for helping businesses maximize the federal COVID relief programs.