Your PPP loan is meant to cover eight or 24 weeks’ worth of expenses. So, your loan forgiveness depends on your costs during the covered period. The clock starts when your lender makes your first PPP loan disbursement.

Can you use 24 weeks of payroll for PPP loan forgiveness?

A borrower may select a covered period between 8 weeks and 24 weeks, which commences upon disbursement of the PPP loan proceeds. Additionally, the borrower must have received a first draw loan and have used the full amount of such loan on or before the disbursement of the second draw loan.

Do you need payroll to apply for PPP loans?

Sole proprietors and the PPP Since you don’t have employees, you won’t be reporting your payroll costs for the PPP loan. Instead, you’ll be reporting your gross business income, which will be reported on line 7 of a Schedule C (for loans prior to March 3, 2021, this was net income).

Does PPP have to be used in 8 weeks?

8-week minimum: The shortest covered period available is 8-weeks. Your covered period may not be less than an 8-week period. 24-week maximum: The longest covered period available is 24-weeks. Your covered period cannot extend beyond 24-weeks.

When does the covered period end on a PPP loan?

•Covered Period – begins on the date the loan proceeds are disbursed and ends 8 weeks (56) days from that date. If 24 weeks, it begins on the date the loan proceeds are disbursed and ends 24 weeks (168 days) from that date. •Alternative Period –Borrowers with a bi-weekly or more frequent payroll schedule may elect the Alternative Period.

When do you need to start payroll with PPP?

PPP funds are intended to cover your payroll expenses for the eight-week period following the first disbursement of the PPP funds. In other words, the clock is ticking and you need to make sure you document every expense as soon as you receive funds—or you could run the risk of losing the loan forgiveness.

When is decision time with your PPP loan?

Decision Time With Your PPP Loan: Eight or 24 Weeks? If you have been keeping up with the Paycheck Protection Program or (PPP) you know that on June 3, the Paycheck Protection Program Flexibility Act of 2020 (PPPFA) made some significant changes to the program.

When do you get forgiveness on your PPP loan?

If you were assigned a PPP loan number on or before June 5, 2020, you now have the option of taking 24 weeks to spend the funds instead of eight weeks. Borrowers whose loan numbers were assigned after June 5 will automatically have a forgiveness period that is the shorter of: 24 weeks, or From the date of the loan to December 31, 2020.