Can A Principal Sign Public Service Loan Forgiveness Certification Form

Can A Principal Sign Public Service Loan Forgiveness Certification Form

The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the process of applying for forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms to meet the requirements of the most recent stimulus legislation. 

The COVID-19 aid package Congress passed last month revived the PPP with $284 billion in funding for small businesses seeking forgivable loans to help them deal with the financial fallout from the coronavirus pandemic. It also included a requirement that the SBA to issue streamlined forms within 24 hours of the bill being signed into law to simplify the application process for forgiveness, along with conditions meant to encourage more loans from community banks, especially for minority-owned businesses who struggled to get loans in the past.

Can A Principal Sign Public Service Loan Forgiveness Certification Form

“The Small Business Administration met the requirements to release the single-page form for PPP loan forgiveness by 24 days after the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released updated forms.”

Terms for forgiveness for the first draw of PPP loans

Can A Principal Sign Public Service Loan Forgiveness Certification Form – For borrowers who are eligible, First Draw PPP loans are suitable for loan forgiveness. This is if the loan disbursement occurs within an 8 to 24 week period.

  • The levels of compensation and employee pay are ensured
  • The loan funds are used on payroll expenses as well as other expenses eligible for reimbursement; and
  • At least 60% of proceeds are used for the cost of payroll

Second Draw PPP Loan Forgiveness Conditions

Second Draw PPP loans given to eligible borrowers qualify for full loan forgiveness if during the 8to 24 week duration following loan disbursement:

  • Employee and compensation levels are kept in the same way as required for the First Draw PPP loan
  • The loan proceeds are spent on payroll and other eligible expenses; and
  • Minimum 60% of funds go to the cost of payroll
  • When and how do I apply for loan forgiveness

The borrower is eligible for forgiveness once all loan proceeds to which the borrower wants forgiveness have been used. Borrowers are able to apply for forgiveness at any time prior until the date of maturity of the loan. If they do not file for forgiveness within 10 years of the date of expiration of the period covered the PPP loan payments can no longer deferred and the borrower will be required to make payment to their PPP lender.

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