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 most recent stimulus legislation.
Congress approved the COVID-19 relief package in the month of March and included $284 billion of financing to small businesses that needed loans. This money was used to mitigate the economic effects of the coronavirus outbreak. It also included a requirement that the SBA to issue streamlined forms within 24 hours of the bill being adopted to make the procedure of applying for forgiveness, along with conditions meant to encourage more bank loans by community banks, especially for minority-owned businesses who were unable to obtain 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 PPP form, which is one page long, for loan forgiveness within 24 hours of 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 new forms that were updated.”
First Draw PPP Terms of loan forgiveness
California Student Loan Forgiveness Programs – First Draw PPP loans given to eligible borrowers qualify for full loan forgiveness if within the 8 to 24 week period that follows loan disbursement:
- It’s the same for employee compensation and the.
- The proceeds of the loan can be used to cover the cost of payroll as well as other eligible expenses.
- At least 60% of the profits are spent on payroll costs
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans made to eligible borrowers qualify for total loan forgiveness if they do so during the 8to 24-week time period after loan payment:
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an identical manner.
- The proceeds of the loan could be used to pay the cost of payroll as well as other eligible expenses.
- At least 60% of the proceeds are used to pay for payroll expenses
- How to apply for loan forgiveness , and when
A borrower can apply for forgiveness once all loan proceeds to which the borrower wants forgiveness have been utilized. Borrowers can request forgiveness at any time up to the date at which the loan matures. If borrowers do not apply for forgiveness within 10 months after the end of the covered period the PPP loan payments can no longer deferred and the borrower will be required to make monthly payments to their PPP lender.