The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the process of applying to forgive Paycheck Protection Program loans, along with newly updated and revised forms that meet the requirements of the most recent stimulus legislation.
Congress approved the COVID-19 relief package in the month of March and offered $284 billion in funding to small businesses that needed loans. The funds were used to reduce the economic burden of the coronavirus pandemic. The package also mandated the SBA to issue streamlined forms within the first 24 hours after the legislation was approved by the lawmaker to streamline the process of applying for forgiveness. The legislation also contained conditions designed to facilitate more loans from community banks, especially for minority-owned businesses who were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within 24 days 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 the updated forms.”
First Draw PPP Loan forgiveness terms
Americorps Loan Forgiveness – For those who qualify First Draw PPP loans are eligible to forgive loans. This applies if the loan disbursement occurs within an 8– to 24-week period.
- The same goes for the pay and benefits for employees.
- The loan proceeds can be used to cover payroll costs or other expenses that are eligible.
- At least 60% of proceeds are spent on payroll costs
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans to eligible borrowers can be eligible for loan repayment if the loan is paid within an 8– 24 week period.
- The First Draw PPP loan requires that the compensation and employee levels be maintained in an identical manner.
- The loan funds can be used to cover payroll costs or other expenses that are eligible.
- At least 60% of funds go to payroll costs
- How do I apply for loan forgiveness , and when to apply
When all of the loan funds have been utilized, a borrower can apply for forgiveness. Borrowers can request forgiveness at any time until the date at which the loan matures. Borrowers who do not request forgiveness within 10 month of the expiration date of the loan are eligible to receive payment from their PPP lender.