The U.S. Small Business Administration issued a one-page application form that aims to simplify the application process for the forgiveness of Paycheck Protection Program loans, together with updated and revised forms that meet the requirements of the most recent stimulus legislation.
The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion of funding for small businesses seeking forgiveness loans to help them deal with the financial fallout of the coronavirus epidemic. The package also mandated the SBA to issue simplified forms within 24 hours of the legislation being signed into law to simplify the application process for forgiveness, along with conditions designed to facilitate more bank loans by community banks, specifically for minority-owned businesses that were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the requirement to issue the one-page PPP form loan forgiveness within the first 24 hours of the date of enactment under 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 the updated forms.”
First Draw PPP Conditions for loan forgiveness
Can Sallie Mae Student Loans Be Forgiven – For those who qualify, First Draw PPP loans are eligible to be forgiven. This applies if the loan disbursement occurs within an 8 to 24-week timeframe.
- Pay and worker levels are ensured
- The loan proceeds are spent on payroll expenses as well as other expenses eligible for reimbursement; and
- A minimum of 60% of the profits are used for the cost of payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans made to eligible borrowers qualify for full loan forgiveness if during the 8to 24 week time period after loan disbursement:
- The levels of compensation and employee pay are maintained in the same way as required for the First Draw PPP loan
- The loan proceeds could be used to pay payroll costs or other expenses that are eligible.
- A minimum of 60% of the profits go towards the cost of payroll
- How do I request loan forgiveness and when to apply
When all of the loan funds have been utilized The borrower may apply for forgiveness. Borrowers can request forgiveness at any time until the loan’s maturity date. If borrowers do not apply for forgiveness within 10 month of the expiration date of the loan are able to receive payment from their PPP lender.