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FAQs on PPP loans, maturity of loans (COVID-19)

FAQs on PPP loans, maturity of loans (COVID-19)

The U.S. Treasury Department updated a set of “frequently asked questions” (FAQs) concerning the Paycheck Protection Program (PPP) as administered by the Small Business Administration (SBA).

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The PPP is one of two programs to provide approximately $900 billion to support lending to both small and large businesses pursuant to measures included in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. No. 116-136).

The FAQs [PDF 120 KB] (updated June 25, 2020) now include FAQ #49 to provide that:

  • A PPP loan has a five-year maturity if it received an SBA loan number on or after June 5, 2020
  • A two-year maturity if the SBA number was received before June 5, 2020 (unless there is an agreement to extend the terms of the loan to five years)
     

Full text of FAQ #49

49. Question: What is the maturity date of a PPP loan?

Answer: If a PPP loan received an SBA loan number on or after June 5, 2020, the loan has a five-year maturity. If a PPP loan received an SBA loan number before June 5, 2020, the loan has a two-year maturity, unless the borrower and lender mutually agree to extend the term of the loan to five years. The promissory note for the PPP loan will state the term of the loan.

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