The U.S. Small Business Administration has released a single-page form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, along with newly updated and revised forms to meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package last month and offered $284 billion in funding to small businesses that needed loans. The funds were used to offset the economic impact of the coronavirus pandemic. The package also mandated the SBA to issue simplified forms within 24 hours of the bill being approved by the lawmaker to streamline the process of applying for forgiveness. It also included conditions meant to encourage more bank loans by community banks, particularly for minority-owned companies that had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for loan forgiveness within 24 days of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published more updated forms.”
Terms for forgiveness for the first draw of PPP loans
Administrative Account Services Loan Forgiveness – For those who qualify, First Draw PPP loans can be eligible for loan forgiveness. This happens if the loan disbursement occurs within an 8 to 24-week period.
- Pay and worker levels are kept at a constant level.
- The loan funds are used on payroll costs as well as other expenses eligible for reimbursement; and
- Minimum 60% of profits go towards expenses for payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans given to eligible borrowers qualify for complete loan forgiveness, if within the 8to 24-week duration following loan disbursement:
- The levels of compensation and employee pay are maintained in the same manner as required for the First Draw PPP loan
- The loan proceeds could be used to cover expenses for payroll or other eligible expenses.
- Minimum 60% of profits go towards expenses for payroll
- How do I apply for loan forgiveness , and the time to apply
A borrower can apply for forgiveness only after the loan’s proceeds for which the borrower has applied for forgiveness have been used. The borrower can apply for forgiveness at any time until the loan’s maturity date. If the borrower does not apply for forgiveness within 10 months of the last day of the covered period the PPP loans are no longer deferred and borrowers will begin making monthly payments to their PPP lender.
Download Administrative Account Services Loan Forgiveness
Gallery of Administrative Account Services Loan Forgiveness
