Capital One PPP Loan Forgiveness Form – The U.S. Small Business Administration has released a form of one page 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 most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month that offered $284 billion in funding for small-scale businesses who needed loans. The money was intended to offset the economic impact of the coronavirus epidemic. The package also mandated the SBA to issue streamlined forms within 24 hours of the legislation being adopted to make the process of applying for forgiveness. The legislation also contained conditions that aim to increase the number of bank loans by community banks, especially for minority-owned companies that struggled to get loans last year.
“The Small Business Administration met the requirement to issue the one-page form for loan forgiveness under the PPP by 24 days after the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published new forms that were updated.”
Forgiveness terms in the initial draw of PPP loans
Capital One PPP Loan Forgiveness Form – First Draw PPP loans made to eligible borrowers qualify for complete loan forgiveness if they do so within the 8 to 24-week period after the loan’s disbursement
- It’s the same for compensation and employees.
- The loan proceeds are used on payroll costs and other expenses that are eligible and
- At least 60% of profits go towards the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans given to eligible borrowers qualify 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 required for the First Draw PPP loan
- The loan funds are used on payroll as well as other eligible expenses and
- At least 60% of proceeds are used for the cost of payroll
- How do I apply for loan forgiveness and when to apply
A borrower may apply for forgiveness once all loan proceeds to which the borrower wants forgiveness have been utilized. Borrowers are able to apply for forgiveness at any time prior until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 months of the end of the time period that was covered the PPP loan payments are not deferred any longer, and the borrower will be required to make payment to their PPP lender.