The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying for the forgiveness of Paycheck Protection Program loans, as well as newly updated and revised forms to meet the requirements of the latest stimulus legislation.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion of funds for small businesses that want forgivable loans to help them deal with the financial fallout of the coronavirus epidemic. The law requires that the SBA provide simplified forms within 24 hours of the signing into law. This was done to facilitate the application for forgiveness. Additionally, it included conditions that encourage community banks to lend more particularly to minority-owned businesses who were unable to obtain loans in the past.
“The Small Business Administration met the requirements to release the one page form for loan forgiveness under the PPP 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 published the updated forms.”
First Draw PPP Conditions for loan forgiveness
Bank Of America Ppp Loan Forgiveness Application – First Draw PPP loans given 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:
- Pay and worker levels are ensured
- The proceeds from the loan may be used to cover the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of the profits are used for the cost of payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans granted to eligible borrowers qualify for full loan forgiveness if during the 8to 24-week duration following the loan’s disbursement
- The levels of compensation and employee pay are maintained in the same manner as required for the First Draw PPP loan
- The loan proceeds are spent on payroll and other expenses that are eligible and
- A minimum of 60% of the funds go to expenses for payroll
- What is the best time to apply for loan forgiveness?
The borrower is eligible for forgiveness once the loan’s proceeds for which the borrower is requesting forgiveness have been utilized. Borrowers can request forgiveness at any time until the date of maturity. If borrowers do not apply for forgiveness within 10 months of the last day of the period covered the PPP loan payments are no longer deferred, and borrowers must make loan payments to their PPP lender.
Download Bank Of America Ppp Loan Forgiveness Application
Gallery of Bank Of America Ppp Loan Forgiveness Application
