The Small Business Administration is in the process of forgiving potentially millions of loans under the Paycheck Protection Program that were approved to support small businesses during the coronavirus pandemic.
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“The SBA began approving forgiveness applications and remitting forgiveness payments to PPP lenders for PPP borrowers on Friday, October 2,” a spokesperson for the SBA said in a statement. “SBA will continue to review all PPP forgiveness applications in an expeditious manner.”
There are a number of criteria that business owners must meet in order to have their loan forgiven, including maintaining staff levels or quickly rehiring workers that were let go. At least 60% of the loan amount must have been put toward payroll expenses, while the remainder could have been used for interest on mortgages, rent, and utilities.
Even if loans, which required no personal guarantees or collateral, are not forgiven, they carry a very low 1% interest rate.
The window to apply for a PPP loan opened in April and expired in August.
According to the Small Business Administration, as of August, more than 5.2 million loans were approved through the relief program, equal to more than $525 billion. The average loan size was $100,729.
Lawmakers have proposed legislation that would afford some small businesses the opportunity to apply for a second loan – but so far Republicans and Democrats in Congress have been unable to reach an agreement on a broader stimulus package.
Nor may help be coming soon. On Tuesday President Trump instructed Republicans to pause discussions until after the presidential election, asking Senate Majority Leader Mitch McConnell, R-Ky., to focus instead on getting his U.S. Supreme Court nominee approved.
FOX Business’ Edward Lawrence contributed to this report.