Borrowers urged to seek PPP loan forgiveness

·3 min read

Aug. 28—Those who received Payment Protection Program loans and don't want to be stuck with repayments will want to submit applications for forgiveness to their lenders or through the Small Business Administration's Direct Borrower Forgiveness Portal.

Deadlines for forgiveness applications are set on an individual basis.

"From the day the PPP loan originated and is signed and funded, 10 months from that day is when the first payment is due on that note," said Terry Lockhart, chief lending officer at Bank of Cherokee County. "Basically, they have eight to 24 weeks to spend the money and distribute the funds. At the end of that eight to 24 weeks, they have 10 months from the time they signed to apply for forgiveness without having to make a payment."

So for example, if the covered period — eight to 24 weeks — for the PPP loan ended on Oct. 30, 2020, the deadline for forgiveness application would be Aug. 30, 2021. Around 85 to 90 percent of borrowers at BCC have already had their loans fully forgiven.

"I know a lot of banks aren't that high," Lockhart said. "There's a ton of them that aren't anywhere near that, but we've got a pretty good process, and we started early on it."

Those who aren't sure when they need to submit their forgiveness applications should get in touch with their bank or lender. It will prevent them from having to return the disaster dollars, and it also stands to benefit the bank.

"From a bank standpoint, we want to get it forgiven and get it off the books, because we've got it loaned out at 1 percent," Lockhart said. "The quicker we get that loan forgiven, the quicker we can re-lend that money out at 4, 5 or 6 percent and make a better return for the bank."

Lockhart's advice is for borrowers to get their forgiveness applications completed and turned into their lender as soon as possible.

"Because right now, the pandemic and everything that's going on is still fresh," he said. "I would only think that as time went further along that, yes, they're going to forgive them, but I'd want to be on the front end and not wait for the end, hoping mine was forgiven."

People who received a PPP loan can also go through the SBA's Direct Borrower Forgiveness Portal, which opened Aug. 4. Borrowers can submit forgiveness forms using a computer or smartphone. On average, users submit their applications in six minutes and received their forgiveness decisions within a week from the time it was turned in. So borrowers don't have to go through their local lenders they used to compete their loans.

"We are incredibly excited that in just two weeks, the Direct Borrower Forgiveness Portal is providing small businesses with a streamlined, user-friendly way to apply for forgiveness and receive relief on these essential PPP loans," said Patrick Kelley, associate administrator for SBA's Office of Capital Access. "Already, we've seen hundreds of thousands of borrowers navigating quickly and easily through the process, and we continue to proactively help borrowers apply through extensive outreach and webinar trainings."

Of the 340,000 applications submitted through the portal, half have already been approved for full or partial forgiveness, totaling more than $2.4 billion. Borrowers whose loans are through banks that have chosen not to opt-in to the SBA's direct forgiveness portal must apply through their lender for forgiveness.

For more information about the SBA's forgiveness portal, visit

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