Q: When can borrowers with Paycheck Protection Program (PPP) loans submit their loan forgiveness applications?
A: As set out in Interim Final Rule #20, borrowers can submit a loan forgiveness application any time on or before the maturity date of the loan—including before the end of the covered period—if the borrower has used all of the loan proceeds the borrower is requesting forgiveness on.
Borrowers who do not apply for loan forgiveness within 10 months after the last day of the covered period, or, if the SBA determines that the loan is not eligible for forgiveness (in whole or in part), the PPP loan can no longer be deferred and the borrower has to begin paying principal and interest. If this happens, lenders are responsible for notifying the borrower of the first payment due date. Lenders also must report that the loan is no longer deferred to SBA on the next monthly SBA Form 1502 report filed by the lender. Unfortunately, it’s still not clear to what extent lenders are allowed to refuse forgiveness applications from borrowers while the lender awaits further guidance from the SBA and/or Treasury, although some lenders are reportedly doing so.
See generally Interim Final Rule #20, here: https://home.treasury.gov/system/files/136/PPP–IFR–Revisions-to-Loan-Forgiveness-Interim-Final-Rule-and-SBA-Loan-Review-Procedures-Interim-Final-Rule.pdf
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