The U.S. Small Business Administration has issued a one-page form that simplifies the application for 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 aid package Congress approved last month renewed the PPP with $284 billion in financing for small-scale businesses looking for forgivable loans to help them deal with the financial fallout of the coronavirus epidemic. The law required that the SBA release simplified forms within 24 hours of the signing into law. This was to facilitate the application for forgiveness. Additionally, it included conditions that encourage community banks to make more loans specifically to minority-owned companies that had difficulty getting loans in the past.
“The Small Business Administration met the requirement to issue the one page form for the forgiveness of PPP loans by 24 days after the date of 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 released new forms that were updated.”
Forgiveness terms in the initial draw of PPP loans
Can Paraprofessionals Get Loan Forgiveness – First Draw PPP loans given to borrowers who meet the criteria are eligible for full loan forgiveness if within the 8-to 24 week period that follows the loan’s disbursement
- The levels of compensation and employee pay are kept at a constant level.
- The loan proceeds are spent on payroll and other expenses that are eligible and
- Minimum 60% of profits go towards the cost of payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans to eligible borrowers can be qualified for loan forgiveness if the loan is paid within an 8– 24-week time frame.
- Employee and compensation levels are kept in the same way as is required for the First Draw PPP loan
- The loan proceeds are spent on payroll expenses and other eligible expenses; and
- At least 60% of proceeds go to payroll costs
- What is the best time to apply for loan forgiveness?
A borrower can apply for forgiveness after the loan’s proceeds for which the borrower wants forgiveness have been utilized. Borrowers can request forgiveness at any time until the date at which the loan matures. If borrowers do not apply for forgiveness within 10 month of the end date of the loan will be able to receive loan payments from their PPP lender.
Download Can Paraprofessionals Get Loan Forgiveness
Gallery of Can Paraprofessionals Get Loan Forgiveness
