The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying to forgive Paycheck Protection Program loans, along with newly updated and revised forms to conform to the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief plan last month that provided $284 billion of funding to small businesses in need of loans. The funds were used to reduce the economic burden 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 would encourage community banks to lend more, especially to minority-owned businesses that had difficulty getting loans last year.
“The Small Business Administration met the requirements to release the one page form for loan forgiveness under the PPP within 24 days of 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 issued updated forms.”
First Draw PPP Loan forgiveness terms
Can You Do Teacher Loan Forgiveness And Pslf – For borrowers who are eligible, First Draw PPP loans are eligible to forgive loans. This is when the loan payment is made within an 8– to 24-week timeframe.
- It’s the same for employee compensation and the.
- The proceeds of the loan can be used to pay for payroll costs or other expenses that are eligible.
- Minimum 60% of funds go to the cost of payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if during the 8to 24-week covered period following loan payment:
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the identical manner.
- The proceeds of the loan can be used to pay expenses for payroll or other expenses that are eligible.
- Minimum 60% of proceeds go to the cost of payroll
- How do I apply for loan forgiveness , and the time to apply
A borrower may apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been used. Borrowers can apply for forgiveness anytime up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months of the expiration date of the loan are able to receive the loan payment from their PPP lender.