Credit Unions Must Notify PPP Borrowers of Extended Deferral Period

The Paycheck Protection Program Flexibility Act of 2020 extended the 6 month deferral period for Paycheck Protection Program (PPP) borrower payments of principal, interest, and fees on all loans. If your credit union hasn’t already done so, we advise notifying PPP borrowers of the deferral period change immediately.

The deferral period now ends:

  • the date that SBA remits the borrower’s loan forgiveness amount to you , or
  • 10 months after the end of the borrower’s loan forgiveness covered period (if the borrower does not apply for loan forgiveness)


According to the SBA/US Treasury, lenders are required to give immediate effect to the statutory extension and should notify borrowers of the change to the deferral period. A formal modification to the promissory note is not required.

For further detail, please reference question & answer #52 on the Treasury’s PPP FAQ Document.


by Holly Ferguson, CPA