Williamson County businesses that received a loan through the Paycheck Protection Program can start applying for forgiveness this week.
More than 6,000 businesses in Williamson County received a loan through the Paycheck Protection Program, a $650 billion federal program designed to help businesses pay employees during the coronavirus pandemic.
If businesses use most of the loan to pay employees, or for some operating expenses like rent and utilities, then they won’t have to pay back the loan. Otherwise, the payment becomes a low interest loan.
Businesses have to submit an application to their lender showing how they spent the money to receive forgiveness. The Small Business Administration, which is managing the program, will started accepting loan forgiveness applications on Monday.
Lane Rhodes, the point person for S.B.A. loans at Nashville-based Pinnacle Financial Partners, said she’s telling most business owners that — unlike the original PPP loan application — there’s no rush to submit the forgiveness application. The deadline to apply is more than 10 months after receiving the loan.
“Wait until this system goes live. Give them a couple of weeks to work out some of the kinks with people that are rushing to apply for forgiveness as soon as it goes live,” Rhodes said.
Any loan payments are already deferred until the end of the end of the year, and Rhodes said Congress is still working out details that could make the forgiveness process even easier. A bipartisan bill introduced in the U.S. Senate in June proposed automatic forgiveness for loans under $150,000.
There are two applications for forgiveness. Many businesses that didn’t reduce employee hours or wages can use a simple three-page form. Other businesses will have to fill out a more complex form.
The forgiveness forms ask businesses to list the number of workers employed when they received the loan and how many are still working there now. It also asks for employee wages, rent payments, utility bills and documentation backing up all those costs.
Rhodes said most businesses that received a loan through Pinnacle, which handled more than 1,000 loans in Williamson County, used the money for payroll or other approved expenses, and she expects most to receive forgiveness.
“What we're hearing is that business owners have already used 100% of their funds," she said. "The majority of them at this point used most of it on payroll ... They used 100%, in a lot of cases, on payroll.”