The U.S. Small Business Administration has issued a one-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the current stimulus law.
The COVID-19 relief package that Congress approved last month renewed the PPP with $284 billion of funding for small businesses seeking forgivable loans to help them deal with the financial fallout of the coronavirus epidemic. The package also mandated the SBA to issue simplified forms within the first 24 hours after the legislation was signed into law to simplify the process of applying for forgiveness. It also included conditions meant to encourage more loans from community banks, especially for minority-owned businesses that struggled to get loans last year.
“The Small Business Administration met the requirement to issue 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 issued updated forms.”
First Draw PPP Conditions for loan forgiveness
Bernie Student Loan Forgiveness Plan – First Draw PPP loans granted to borrowers who are eligible can be granted total loan forgiveness within the 8 to 24 week period that follows loan disbursement:
- Pay and worker levels are ensured
- The loan funds are used on payroll and other eligible expenses; and
- A minimum of 60% of profits are used for the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans for eligible borrowers can be qualified for loan forgiveness if the loan is paid within an 8– to 24-week period.
- The levels of compensation and employee pay are kept in the same way as required for the First Draw PPP loan
- The loan proceeds can be used to pay for the cost of payroll as well as other eligible expenses.
- Minimum 60% of proceeds go to expenses for payroll
- When and how do I apply for loan forgiveness
After all loan’s proceeds have been used, a borrower can apply for forgiveness. The borrower can request forgiveness any time up to the maturity date of the loan. If the borrower does not apply for forgiveness within 10 months after the end of the time period that was covered and the loan is not renewed, PPP loan payments can no longer deferred, and the borrower will be required to make monthly payments to their PPP lender.
Download Bernie Student Loan Forgiveness Plan
Gallery of Bernie Student Loan Forgiveness Plan
