The U.S. Small Business Administration has released a single-page form that aims to simplify the application process to forgive Paycheck Protection Program loans, as well as newly updated and revised forms that comply with the latest stimulus legislation.
Congress approved the COVID-19 relief package last month, which included $284 billion of financing to small businesses that needed loans. The funds were used to mitigate the economic effects of the coronavirus pandemic. The law required that the SBA release simplified forms within 24 hours of the signing into law. This was to make it easier to apply for forgiveness. The legislation also contained conditions that encourage community banks to make more loans, especially to minority-owned businesses who had a difficult time getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the obligation to issue the one-page PPP form loan forgiveness within 24 hours of the date of enactment in the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published updated forms.”
First Draw PPP Terms of loan forgiveness
Biden Student Loan Forgivness – For borrowers who are eligible First Draw PPP loans are eligible for loan forgiveness. This is if the loan disbursement occurs within an 8– to 24-week timeframe.
- The same goes for the compensation and employees.
- The loan proceeds are used on payroll and other expenses that are eligible and
- A minimum of 60% of the funds go to expenses for payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans to qualified borrowers are eligible for loan forgiveness when the loan is repaid within an 8– to 24 week time frame.
- Pay and worker levels are kept in the same way in accordance with the First Draw PPP loan
- The loan funds can be used to cover the cost of payroll as well as other eligible expenses.
- A minimum of 60% of the profits are used to pay for payroll expenses
- When and how do I apply for loan forgiveness?
Once all of the loan proceeds have been used, a borrower can apply to be granted forgiveness. The borrower can apply for forgiveness at any point up to the date of maturity. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan will be able to receive loan payments from their PPP lender.