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Business Insights

Key PPP Forgiveness Questions for 2023

Kamil Maka
4 Minutes to read

As the Paycheck Protection Program (PPP) has come to a close and most loan forgiveness decisions have already been made, NEWITY is here to answer some final FAQs going into the start of 2023:

Q: How long does the SBA have to audit me?

A: Per program guidelines, the SBA may review any PPP loan of any size at any time in their discretion. Having said that, based on document retention guidelines noted immediately below, barring unusual circumstances, it seems unlikely SBA would review a loan of more than $150,000 more than 6 years after the loan is forgiven or repaid in full, or would review a loan of $150,000 or less more than 4 years after the forgiveness application is submitted to the SBA.

Q: How long do I need to keep my PPP loan documentation on file?

A: The SBA requires that borrowers with loan amounts over $150,000 retain all supporting documentation for 6 years after the date the loan is forgiven or repaid in full.

Borrowers with loan amounts of $150,000 or less are required to retain all employment records and payroll documentation for 4 years and all other documentation for 3 years after the date the loan forgiveness application is submitted to the SBA.

Q: How is PPP loan forgiveness taxable for 2023? 

A: PPP loan forgiveness is not taxable at the federal level but may be taxed at the state level. Please consult with your tax advisor to determine your specific tax liability, if any.

Q: What happens in a SBA review after applying for forgiveness?

A: You can read about SBA reviews of PPP loans here.

Q: What if I haven’t applied for PPP loan forgiveness yet? Can I still apply?

A: In many cases, yes. You may submit and application for forgiveness of your PPP loan any time on or before the loan maturity date. However, if a forgiveness application has not been submitted by 10 months after the maximum covered period of 24 weeks (known as the Payment Deferral Period), you would be required to begin making monthly payments of principal and interest.

If you wish to apply for forgiveness but have not yet done so, we recommend completing the process as soon as possible as most PPP loans are already past their deferral period end date.

If you received your PPP loan through NEWITY, you can easily complete your PPP forgiveness application in the Smart Portal.

Q: Is there anywhere else I can get small business capital now that PPP has ended?

A: We recommend looking into the SBA 7(a) program, offering loans of up to $500,000 which you can apply for in 30 minutes or less in the NEWITY portal. Learn more here.

To qualify for an SBA 7(a) small business loan, your business must be:

  1. U.S.-based and operated
  2. Owner supported / owner funded
  3. Eligible per the SBA’s requirements

Your loan amount will determined by the business’ average annual revenue, FICO score, and years in business