The U.S. Small Business Administration issued a one-page application form that aims to simplify the application process for forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package in the month of March, which included $284 billion of financing to small businesses that needed loans. The money was intended to mitigate the economic effects of the coronavirus epidemic. It also included a requirement that the SBA to issue streamlined forms within 24 days of the legislation being signed into law to simplify the procedure of applying for forgiveness, along with conditions designed to facilitate more bank loans by community banks, particularly for minority-owned companies that struggled to get loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for loan forgiveness within the first 24 hours of the date of enactment in the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released new forms.”
Forgiveness terms for the first draw of PPP loans
Canada Student Loan Forgiveness Alberta – For borrowers who are eligible First Draw PPP loans can be qualified to forgive loans. This happens when the loan payment is made within an 8– to 24-week timeframe.
- This is also true for compensation and employees.
- The loan proceeds are used on payroll and other eligible expenses; and
- A minimum of 60% of the funds go to expenses for payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans given to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8– to 24-week covered period following the loan’s disbursement
- Pay and worker levels are maintained in the same manner as is required for the First Draw PPP loan
- The loan proceeds are used on payroll expenses as well as other eligible expenses and
- A minimum of 60% of the proceeds are used to pay for payroll expenses
- How and when to apply for loan forgiveness?
Once all of the loan proceeds have been used The borrower may apply to be granted forgiveness. The borrower can apply for forgiveness at any time until the date at which the loan matures. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period the PPP loans are no longer deferred, and the borrower will be required to make monthly payments to their PPP lender.