Frequently Asked Questions
What happens if I am not approved for forgiveness?
What happens to loan amounts that are not forgiven?
For loans funded before June 5th 2020 any loan amounts not forgiven, the SBA allows a loan payback term of two years at 1% interest rate with payments deferred for the first six months. For loans funded on or after June 5th 2020 any loan amounts not forgiven, the SBA allows a loan payback term of five years at 1% interest rate with payments deferred for the first six months.
When does the deferment period begin for the amount not forgiven?
As it stands now, payments on the amount that is not forgiven begin 6 months after the borrower received funding.
What happens if a decision on forgiveness is not made before the loan payments are scheduled to begin?
As it stands now, the borrower would be responsible to make the required payments, again this could change.
When will the monthly payment amount be provided to the customer? Are monthly statements provided showing balance and interest break down? Is the interest tax deductible?
15 days before the payment is due the borrower will get a billing statement in the mail. Statements breakdown principal and interest. If a borrower received funding in May, then in mid-October they would receive a billing statement. Regarding the tax deduction, generally speaking mortgage interest is an operating expense that is deductible, but that would also depend on how the company is formed.
Are there any penalties or fees if I pay back my loan early?
There are no prepayment penalties or fees.
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