Your "covered period" simply refers to the timeframe you have to spend your PPP funds on eligible expenses in order to qualify for loan forgiveness. All your payments (including principal, interest) are deferred up to 10 months after your covered period.
If you were funded before June 5, 2020: You have the ability to choose between an 8-week or 24-week covered period.
- You must apply for forgiveness within 10 months of your covered period which could begin as early as April 2021.
If you were funded after June 5, 2020: You have the 24-week covered period.
- You must apply for loan forgiveness within 10 months of your covered period, which could begin as early as August 2021.
The benefits of choosing an 8-week covered period:
- Wrapping up the forgiveness process earlier
The benefits of choosing a 24-week covered period:
- You'll have more time to incur eligible expenses and increase your chances of getting full loan forgiveness
- You'll have more time to plan with your account or financial advisor to gather the necessary documentation needed for forgiveness
- You get a chance to rehire or restore wages to employees that were furloughed, laid off, or had their wages lowered.
- Potential favorable future updates coming out to further simply the loan forgiveness process