The U.S. Small Business Administration has released a single-page form aimed at simplifying the process of applying to forgive Paycheck Protection Program loans, as well as newly updated and revised forms that comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief package last month, which included $284 billion of financing to small businesses in need of loans. The money was intended to offset the economic impact of the coronavirus pandemic. The law requires that the SBA release simplified forms within 24 hours of the signing into law. This was to make it easier to apply for forgiveness. Additionally, it included conditions to encourage community banks to make more loans, especially to minority-owned businesses who had a difficult time getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs wrote that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within 24 hours of 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 more updated forms.”
First Draw PPP Conditions for loan forgiveness
Art Institute Loan Forgiveness – For those who qualify, First Draw PPP loans can be qualified for loan forgiveness. This is when the loan payment is made within an 8 to 24-week period.
- The same goes for the pay and benefits for employees.
- The loan funds are used on payroll and other eligible expenses; and
- A minimum of 60% of the profits go towards expenses for payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if during the 8to 24-week time period after the loan’s disbursement
- Pay and worker levels are kept in the same way as is required for the First Draw PPP loan
- The loan proceeds are spent on payroll as well as other eligible expenses and
- A minimum of 60% of profits are used for the cost of payroll
- How to request loan forgiveness and when to apply
Once all of the loan proceeds have been used The borrower may apply to be granted forgiveness. Borrowers can request forgiveness at any time until the date of maturity. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan are eligible to receive payment from their PPP lender.
Download Art Institute Loan Forgiveness
Gallery of Art Institute Loan Forgiveness
