The U.S. Small Business Administration issued a one-page application form that aims to simplify the application process to forgive Paycheck Protection Program loans, along with newly revised and updated forms to meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package last month, which offered $284 billion in funding to small businesses in need of loans. The money was intended to mitigate the economic effects of the coronavirus pandemic. The legislation required that the SBA provide simplified forms within 24 hours of the signing into law. This is to simplify the process of applying for forgiveness. Additionally, it included conditions that encourage community banks to lend more particularly to minority-owned businesses who had a difficult time getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and wrote that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within 24 days of the date of enactment under the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published the updated forms.”
First Draw PPP Terms of loan forgiveness
Aes Teacher Loan Forgiveness Form – First Draw PPP loans granted to borrowers who are eligible can be granted complete loan forgiveness if they do so within the 8-to 24 week period that follows the disbursement of loan:
- It’s the same for employee compensation and the.
- The loan funds are used on payroll costs as well as other expenses eligible for reimbursement; and
- A minimum of 60% of proceeds are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans for eligible borrowers can be eligible for loan repayment when the loan is paid within an 8to 24 week time frame.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an exactly the same manner.
- The loan proceeds are spent on payroll and other expenses that are eligible and
- Minimum 60% of proceeds go to payroll costs
- How do I apply for loan forgiveness and when
Once all of the loan proceeds have been used, a borrower can apply for forgiveness. Borrowers are able to apply for forgiveness at any time prior until the date of maturity of the loan. If the borrower does not apply for forgiveness within 10 months of the last day of the covered period, then PPP loan payments are not deferred any longer, and the borrower will be required to make payment to their PPP lender.