Q: SBA will deduct the amount of any Economic Injury Disaster Loan (EIDL) advance received by a PPP borrower from the forgiveness amount remitted to the lender. How will a lender know the amount of the EIDL advance that will be automatically deducted by SBA?
A: If a borrower received an EIDL advance, SBA is required to reduce the borrower’s loan forgiveness amount by the amount of the EIDL advance. SBA will deduct the amount of the EIDL advance from the forgiveness amount remitted by SBA to the lender. The lender will be able to confirm the amount of the EIDL advance that will be automatically deducted by SBA from the forgiveness payment by reviewing the borrower’s EIDL advance information in the PPP Forgiveness Platform.
This Q&A was based on information contained in the Treasury Department’s October 13, 2020, version of “Paycheck Protection Program Loans, Frequently Asked Questions on PPP Loan Forgiveness,” which may be updated from time to time. This CARES Act / SBA / PPP Loan Forgiveness-related issuance may be found here: https://home.treasury.gov/system/files/136/PPP--Loan-Forgiveness-FAQs.pdf