Home Health & Hospice Week

Home health and hospice agencies that received COVID-19 relief funds via the Paycheck Protection Program have one more shot to get repayment of those monies forgiven — but they must act quickly.

Reminder: Under the PPP program, the loan can be fully forgiven if: the loan proceeds were spent, or the qualifying costs incurred, within the covered period; the funds were used for payroll costs and the other permitted uses; at least 60 percent of the loan amount was used for payroll costs; and certain other conditions, such as maintaining employment and wage levels, are met, reviews human resources firm ADP Inc. in online analysis.

According to Small Business Administration data last updated in October 2023, SBA disbursed more than $785 billion through more than 11 million loans in two “draws” taking place in 2020 and 2021. About 93 percent of loan applicants have requested forgiveness of those loans, SBA reported in October.

But that left about $30 billion in delinquent debt, the SBA Office of Inspector General warned at the time. The Biden administration initially said it was going to halt collections efforts on PPP loans that were under $100,000, because the federal government would actually lose money in the whole process.

Don't Throw Away $100K, Critics Say

But after coming under fire from the OIG and politicians, the SBA decided to pursue those collections after all, according to press reports.

However, before doing so, the SBA is going to give businesses one last chance to seek forgiveness of those loans, the agency announced last month. The same goes for COVID-19 Economic Injury Disaster Loans (EIDLs).

“For COVID EIDL and PPP borrowers with loans under $100,000, the SBA has implemented a 60-day goodwill exception period starting January 1 and lasting through March 3, 2024,” it says in a release. “During this period, the SBA will build on its extensive outreach to affected businesses to ensure that PPP borrowers know how to apply for forgiveness and COVID EIDL borrowers are aware of all repayment options,” SBA continues. “Further, the SBA will refrain from escalating collections activities until after the goodwill exemption period.”

The “expanded flexibility and accommodations for COVID EIDL and PPP borrowers [will] help bring them into compliance and avoid the repercussions of defaulting on a government loan,” SBA emphasizes. “The benefits of getting, and staying, current on SBA loans include better credit scores, which make it cheaper and easier to buy a home or car in the future; eligibility for future government financial assistance, like a VA loan or help after a natural disaster; and, in some cases, avoidance of federal and private collections activities which can include withholding tax returns and wage garnishment.”

Those punitive actions will occur through referrals to the Internal Revenue Service and Treasury Department, experts highlight.

Bottom line: “Small business borrowers in delinquency or default who take action and obtain good standing with the SBA will improve their long-term financial health substantially,” SBA stresses.

PPP loans are eligible for forgiveness, but EIDL loans are not, the agency reminds in the release. However, “the SBA has programs to help — including expanded hardship accommodation plans. COVID EIDL hardship accommodation plans significantly lower monthly payments — sometimes as low as $25 per month — for six months, and then payments gradually increase over a multi-year period,” the agency explains.