PPP Loan Forgiveness

Feb 14, 2024  -  News & Updates

There are hundreds of Paycheck Protection Program (PPP) borrowers in West Virginia who have not requested forgiveness for their loan.  These loans were taken out back in 2020 and 2021.  

Here is the official information: PPP loan forgiveness | U.S. Small Business Administration (sba.gov)

We’ve learned that many PPP loans have not been forgiven and are currently in default. Even though these loans are technically charged off (that is, off SBA’s books), PPP loans of $100,00 and less have not been sent to The U.S. Department of the Treasury for collections. 

There is currently a grace period in effect until March 3, 2024. After that SBA is required to begin referring these smaller PPP loans to The U.S. Department of the Treasury in batches.The Treasury has the power to withhold future government money like tax refunds, add a 30% penalty, and hire private debt collectors to pursue repayment using tactics like wage garnishment. Ultimately, the unpaid loan can be reported to the IRS and declared as income. See Treasury Offset Program - How TOP Works and Cross-Servicing (treasury.gov)

There is a currently a quick fix for those PPP borrowers with loans $110k/under and whose lenders have opted into SBA’s PPP Direct Forgiveness Portal. It takes only about 10 minutes.