The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the process of applying to forgive Paycheck Protection Program loans, as well as newly updated and revised forms to meet the requirements of the most recent stimulus legislation.
Congress approved the COVID-19 relief package last month and included $284 billion of financing to small businesses in need of loans. This money was used to mitigate the economic effects of the coronavirus pandemic. It also included a requirement that the SBA to issue simplified forms within 24 days of the legislation being adopted to make the procedure of applying for forgiveness, along with conditions that aim to increase the number of bank loans by community banks, especially for minority-owned businesses who struggled to get loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the obligation to issue the one-page PPP form loan forgiveness within the first 24 hours from the date of enactment in the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued new forms that were updated.”
Forgiveness terms in the initial draw of PPP loans
2007 Student Loan Forgiveness – For eligible borrowers First Draw PPP loans can be eligible for loan forgiveness. This is when the loan payment is made within an 8 to 24-week period.
- This is also true for compensation and employees.
- The loan proceeds are spent on payroll costs and other expenses that are eligible and
- A minimum of 60% of the proceeds go to the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to qualified customers are eligible for loan repayment if the loan is paid within an 8– 24-week period.
- Pay and worker levels are maintained in the same way in accordance with the First Draw PPP loan
- The proceeds of the loan can be used to pay for the cost of payroll as well as other eligible expenses.
- At least 60% of proceeds are used for the cost of payroll
- What is the best time to apply for loan forgiveness?
A borrower can apply for forgiveness once the loan’s proceeds for which the borrower has applied for forgiveness have been utilized. Borrowers may apply for forgiveness at any point up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 month of the end date of the loan are eligible to receive payment from their PPP lender.
Download 2007 Student Loan Forgiveness
Gallery of 2007 Student Loan Forgiveness
