Should You Wait to Apply for PPP Forgiveness?

Sep 30, 2020 | Business, Small Business, Taxes

In a year that most of are ready to be done with, a bright spot for many small businesses came in the form of the Payroll Protection Program (PPP) (see our previous post: Payroll Protection Program — What Strings Are Attached?) that Congress passed back in April as part of the CARES Act. The PPP authorized up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis, and that was then upped another $321 billion a couple of months later. This program has provided many small businesses with the cash flow necessary to keep their employees working and products and services moving in the marketplace.

A great benefit of utilizing this program is that if you meet certain criteria, you will be able to apply for loan forgiveness from the Small Business Administration (SBA). And folks, the time is nigh to be able to start the forgiveness process.

But a question we want you to ask yourself is, “Should I apply for PPP forgiveness now? Or should I wait?”


First, the biggest benefit of applying for PPP loan forgiveness now is that it’s not a short process! Once you apply, the bank will have up to 60 days to process your forgiveness request, and then the SBA will have up to 90 days to review the request before they decide whether to approve your forgiveness. So if you want to get the loan forgiven by the end of 2020 for tax purposes, the sooner you start the better!

Another reason you may want to apply for PPP loan forgiveness now is that Congress may give further guidance that would be less favorable for your forgiveness percentage. If you apply now, you could circumvent the negative effects of that potential change.

Thirdly, if you are in danger of needing to let some employees go by the end of the year, you should go ahead and apply now so that your forgiveness percentage won’t be affected by the steps you deem necessary to keep your business afloat. 


You may have read the previous section and immediately saw the benefit of applying for forgiveness ASAP. We hope you continue reading and see why you may want to wait!

First, you may want to wait in applying for PPP loan forgiveness because Congress may change their guidance. “Wait, didn’t you say that’s why we should apply now?” Well, yes. Yes, we did. You’re taking a chance either way. As an example, when the PPP was first announced, you needed to spend 75% of your loan amount on payroll in order to gain forgiveness; but they later changed that down to 60%. The time frame for needing to spend the PPP funds has also changed.

Another reason to hold off would be that Congress may give further clarification as to what can be considered for loan usage.  An example is that it was only recently that we were told that employer contributions for vision and dental benefits of their employees can be considered a payroll cost. There will likely be future clarifications made as more and more people rush to apply for forgiveness.

Thirdly, according to some sources, there has been “talk of forgiving all PPP loans that fall below a certain dollar threshold. Businesses that received modest loans, therefore, may not need to go through the process of applying for forgiveness at all.”

So don’t be rushed to apply for PPP loan forgiveness unless you absolutely need to. It may be that waiting will have its own payoff in the long run. We know, it seems like a gamble either way. Do know that if you’d like to talk about your PPP options, we would love to help you—it’s what we do. Give us a call, and we can talk you through your specific needs, shedding light on what may be the best path for you to take.

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