The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that comply with the current stimulus law.
Congress approved the COVID-19 relief package last month that offered $284 billion in funding for small-scale businesses who needed loans. This money was used to mitigate the economic effects of the coronavirus epidemic. The package also mandated the SBA to issue streamlined forms within the first 24 hours of the bill being adopted to make the procedure of applying for forgiveness. The legislation also contained conditions meant to encourage more loans from community banks, particularly for minority-owned companies that struggled to get loans in the past.
“The Small Business Administration met the requirement of releasing the single-page form for PPP loan forgiveness by 24 days after the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued updated forms.”
Forgiveness terms for the first draw of PPP loans
Apply For Federal Student Loan Forgiveness Form For Disabled Veterans – First Draw PPP loans granted to eligible borrowers qualify for complete loan forgiveness if they do so during the 8- to 24 week period that follows the disbursement of loan:
- The levels of compensation and employee pay are ensured
- The proceeds from the loan may be used to pay for payroll costs or other eligible expenses.
- A minimum of 60% of the profits are used for the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to qualified borrowers can be eligible for loan repayment when the loan is repaid within an 8to 24 week period.
- Pay and worker levels are maintained in the same way as required for the First Draw PPP loan
- The loan funds are used on payroll expenses and other expenses that are eligible and
- Minimum 60% of funds go to payroll costs
- How and when to apply for loan forgiveness
Once all of the loan proceeds have been used the borrower is eligible for forgiveness. The borrower can apply for forgiveness at any time until the date at which the loan matures. If borrowers do not apply for forgiveness within 10 month after the date they will be able to repay the loan are eligible to receive payment from their PPP lender.
Download Apply For Federal Student Loan Forgiveness Form For Disabled Veterans
Gallery of Apply For Federal Student Loan Forgiveness Form For Disabled Veterans
