Addressing EIDL, PPP Forgiveness Issues
As more borrowers apply for PPP loan forgiveness, more bankers become aware of the existence of those borrowers’ EIDLs and EIDL Advances. Many borrowers incorrectly believe their EIDL Advances are grants that have no intersection with their outstanding PPP loans. Bankers, in turn, are quickly realizing that because of shifting policies on the forgiveness of EIDLs and EIDL Advances, unforgiven PPP debt may linger on their banks’ books for much longer than previously expected.
TBA along with ABA and other financial trade groups recently urged Congress to address the Small Business Administration’s approach to loan forgiveness for borrowers that received both Economic Injury Disaster Loans and Paycheck Protection Program loans. The joint trades letter urged the leaders of the Senate Small Business and Entrepreneurship Committee and House Committee on Small Business to immediately find a solution that will fully restore PPP forgiveness for those small businesses that received both PPP loans and EIDLs/EIDL Advances. For additional details, read the letter here.