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What is the PPP loan deferral period?

Businesses that have received a PPP loan are not obligated to make payments against the loan until the end of their PPP loan deferral period. This deferral period is 10 months long and begins at the end of the covered period for all loans issued after June 5, 2020. For loans issued before June 5, 2020, Biz2Credit allows the same 10-month deferral period to apply.

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 Paycheck Protection Flexibility Act, which went into effect June 5, 2020 extended the deferral period for PPP loan payments from six months to 10 months after the end of the borrower’s loan forgiveness covered period. Following the covered period, the deferral period will begin either on the date the SBA remits the borrower’s loan forgiveness amount to the lender, or if the borrower does not apply for loan forgiveness at the end of the full 10 months.  

Please note, SBA grants borrowers a deferral period of up to 10 months starting at the end of the covered period. If by the end of the deferral period the borrower has not applied for forgiveness, or the full amount of the loan was not forgiven, then the borrower will need to repay any remaining balance on the loan according to the payment schedule outlined in the loan agreement that the borrower signed prior to funding.