How long is the covered period for first and second time PPP loans?
The PPP loan covered period was updated with passage of the Economic Aid Act. PPP loan borrowers may choose the length of their covered period as anywhere between 8 and 24 weeks.
For borrowers that received their PPP loan in 2020, covered periods may be either 8 or 24 weeks, at the choice of the borower. For borrowers receiving their PPP loan in 2021, the covered period can be any period between 8 to 24 weeks following the date of disbursement of the PPP loan, with the exact term determined by the borrower during the PPP forgiveness application process.
The covered period provides a timeline within which PPP borrowers need to use their PPP funds and meet the requirements for FTE calculations, payroll, and eligible non-payroll expenses. Covered periods between First Draw and Second Draw loans also cannot overlap. Failure to meet these three requirements within the chosen covered period can result in a reduced amount of forgiveness.