The U.S. Small Business Administration released a one-page form that aims to simplify the process of applying for forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms that meet the requirements of the latest stimulus legislation.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion of funding for small businesses seeking forgiveness loans to help them deal with the financial fallout from the coronavirus outbreak. 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, along with conditions designed to facilitate more loans from community banks, particularly for minority-owned businesses that had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within the first 24 hours from 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 issued more updated forms.”
First Draw PPP Loan forgiveness terms
Are Stafford Loans Eligible For Loan Forgiveness – First Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness during the 8- to 24 week period that follows the disbursement of loan:
- Employee and compensation levels are maintained
- The proceeds from the loan may be used to pay payroll costs or other expenses that are eligible.
- At least 60% of profits are spent on payroll costs
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans made to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8to 24-week duration following loan payment:
- The levels of compensation and employee pay are kept in the same way in accordance with the First Draw PPP loan
- The loan proceeds could be used to cover payroll costs or other expenses that are eligible.
- At least 60% of funds go to the cost of payroll
- How to apply for loan forgiveness , and when
Once all of the loan funds have been utilized, a borrower can apply to be granted forgiveness. Borrowers may apply for forgiveness at any time until the date at which the loan matures. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan are able to receive payment from their PPP lender.
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