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Can an SBA Loan be Forgiven?
Yes, borrowers of SBA disaster loans are eligible for loan forgiveness. A borrower of an SBA Loan is eligible to have their loan forgiven up to the amount the borrower spent on the items below during the 8-week period starting on the date of loan origination:
- The cost of payroll
- Interest on the mortgage obligation incurred in the ordinary course of business
- Leasing agreement rent
- Utility payments, (internet, telephone, transportation, water, gas, electricity)
- Any additional wages paid to your employees who are normally tipped
- Loan forgiveness can’t exceed the principle
- The loan forgiveness cannot exceed the principal.
The loan forgiveness amount calculated above will get reduced if you reduce the number of employees you have working or if you reduce wages paid to employees by 25% or more.
According to WashingtonPost, “Yes. The act includes loan forgiveness for companies able to keep employees on payroll or continue paying bills throughout the coronavirus crisis.”
Learn more about SBA Disaster Loans