The U.S. Small Business Administration has released a form of one page that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms to comply with the current stimulus legislation.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgiveness loans to help them deal with the financial fallout from the coronavirus outbreak. It also included a requirement that the SBA to issue streamlined forms within the first 24 hours of the bill being signed into law to simplify the process of applying for forgiveness. It also included conditions designed to facilitate more loans from community banks, specifically for minority-owned businesses who struggled to get loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the requirement to publish the one-page PPP form loan forgiveness within 24 days of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued updated forms.”
First Draw PPP Loan forgiveness terms
Acs Student Loan Forgiveness Form – First Draw PPP loans given to borrowers who are eligible can be granted total loan forgiveness within the 8 to 24-week period after the disbursement of loan:
- It’s the same for compensation and employees.
- The loan proceeds can be used to pay expenses for payroll or other expenses that are eligible.
- A minimum of 60% of the profits go towards expenses for payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans for eligible customers are qualified for loan forgiveness when the loan is paid within an 8– to 24-week period.
- Employee and compensation levels are kept in the same way as is required for the First Draw PPP loan
- The loan funds are used on payroll and other eligible expenses; and
- At least 60% of the proceeds are spent on payroll costs
- What is the best time to apply for loan forgiveness?
When all of the loan funds have been utilized The borrower may apply to be forgiven. The borrower can request forgiveness at any time prior until the date of maturity of the loan. Borrowers who do not request forgiveness within 10 months after the date they will be able to repay the loan will be able to receive loan payments from their PPP lender.