Loan Payment

The PPP loan will accrue interest at an annual rate of 1%. No payment is due during the deferral period, which ends the earlier of:

• The date when the SBA remits the amount of forgiveness on your loan; or
• 10 months after the last day of your covered period, if you have not applied for forgiveness.
• If your loan is forgiven, any interest accrued during the deferral period is eligible for forgiveness.

After the deferral period any balance that is not forgiven (including any accrued interest on the unforgiven portion) will become a term loan. Monthly payments will be due up to the maturity date, which is generally:

• Two years from the date your loan was made if your loan received an SBA guarantee number before June 5, 2020; or
• Five years from the date your loan was made if your loan received an SBA guarantee number on or after June 5, 2020.

If a PPP loan received an SBA loan number on or after June 5, 2020, the loan has a five-year maturity. If a PPP loan received an SBA loan number before June 5, 2020, the loan has a two-year maturity, unless the borrower and lender mutually agree to extend the term of the loan to five years. The promissory note for the PPP loan will state the term of the loan.

The maturity date of a Second Draw PPP Loan is 5 years.

If a loan is 100% forgiven, it is considered matured at the date the forgiveness is approved.

If you submit to your lender a loan forgiveness application within 10 months after the end of your loan forgiveness covered period, you will not have to make any payments of principal or interest on your loan before the date on which SBA remits the loan forgiveness amount on your loan to your lender (or notifies your lender that no loan forgiveness is allowed). Your ‘‘loan forgiveness covered period’’ is the period beginning on the date the lender disburses the PPP loan and ending on any date selected by the borrower that occurs during the period (i) beginning on the date that is 8 weeks after the date of disbursement and (ii) ending on the date that is 24 weeks after the date of disbursement. Your lender must notify you of remittance by SBA of the loan forgiveness amount (or notify you that SBA determined that no loan forgiveness is allowed) and the date your first payment is due. Interest continues to accrue during the deferment period. If you do not submit to your lender a loan forgiveness application within 10months after the end of your loan forgiveness covered period, you must begin paying principal and interest after that period. For example, if a borrower’s PPP loan is disbursed on January 25, 2021, the 24-week period ends on July 12, 2021. If the borrower does not submit a loan forgiveness application to its lender by May 12, 2022, the borrower must begin making payments on or after May 12, 2022.

SBA extended the repayment date for this safe harbor to May 14, 2020 and subsequently extended it again to May 18, 2020. See FAQ #47. Borrowers did not need to apply for the extensions. The extensions were implemented through revisions to the SBA’s interim final rule providing the safe harbor. See FAQ #46 for additional guidance on how SBA will review the certification.

Yes, SBA extended the repayment date for this safe harbor to May 18, 2020, to give borrowers an opportunity to review and consider FAQ #46. Borrowers did not need to apply for this extension. This extension was implemented through a revision to the SBA’s interim final rule providing the safe harbor.