The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the application process to forgive Paycheck Protection Program loans, along with newly updated and revised forms to meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package last month and included $284 billion of financing for small-scale businesses who needed loans. The money was intended to reduce the economic burden of the coronavirus epidemic. The law requires that the SBA provide simplified forms within 24 hours of the signing into law. This was to facilitate the application for forgiveness. The legislation also contained conditions to encourage community banks to lend more specifically to minority-owned companies who were unable to obtain loans last year.
“The Small Business Administration met the requirement to issue the one page form for PPP loan forgiveness within 24 days of the date of enactment 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 updated forms.”
First Draw PPP Conditions for loan forgiveness
Car Loan Forgiveness Program – First Draw PPP loans given to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8- to 24 week period that follows the loan’s disbursement
- Employee and compensation levels are ensured
- The proceeds of the loan can be used to cover expenses for payroll or other eligible expenses.
- At least 60% of the profits are spent on payroll costs
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans for eligible borrowers are eligible for loan repayment when the loan is paid within an 8– 24-week period.
- The First Draw PPP loan requires that the compensation and employee levels be maintained in the identical manner.
- The loan proceeds are spent on payroll costs and other expenses that are eligible and
- At least 60% of the profits are spent on payroll costs
- When and how do I apply for loan forgiveness
The borrower is eligible for forgiveness once the loan’s proceeds for which the borrower is requesting forgiveness have been used. The borrower can request forgiveness at any time prior until the date of maturity of the loan. If the borrower does not apply for forgiveness within 10 years of the date of expiration of the period covered and the loan is not renewed, PPP loans are not deferred any longer, and borrowers must make monthly payments to their PPP lender.
Download Car Loan Forgiveness Program
Gallery of Car Loan Forgiveness Program
