1/8/2021 9:20 PM
The latest Coronavirus relief bill passed on December 27, 2020. As mentioned in our earlier post, one provision changed the treatment of EIDL advances as they relate to PPP forgiveness. Under the old rules, if you received an EIDL advance, it reduced your PPP forgiveness amount. But under the new rules, EIDL advances will not reduce your PPP forgiveness amount.
So, what if you already received PPP forgiveness under the old rules? Your EIDL advance reduced your forgiveness amount. If you otherwise achieved full forgiveness, you essentially were left with a small PPP loan to repay equal to your EIDL advance. “That’s not fair!” you say. After all, those who are just now applying for forgiveness have the opportunity to have their entire loan wiped away. The SBA issued a notice today rectifying this discrepancy. They will remit payment to your PPP lender for the amount of your EIDL advance, essentially allowing you the full PPP forgiveness for which you were eligible. In most cases, this will mean 100% forgiveness of your PPP loan. If you already made any PPP loan payments that have now become unnecessary, have no fear. Your lender should refund them to you.