The U.S. Small Business Administration has released a form of one page which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that comply with the current stimulus law.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion of funding for small businesses seeking forgiveness loans to help them deal with the financial fallout from the coronavirus outbreak. It included a requirement for the SBA to issue streamlined forms within 24 days of the legislation being approved by the lawmaker to streamline the process of applying for forgiveness. It also included conditions meant to encourage more bank loans by community banks, specifically for minority-owned businesses who were unable to obtain loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the obligation to issue the one-page PPP form loan forgiveness within the first 24 hours of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published new forms that were updated.”
First Draw PPP Terms of loan forgiveness
Corinthian College Student Loan Forgiveness News – First Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness within the 8-to 24-week covered period following loan disbursement:
- This is also true for pay and benefits for employees.
- The proceeds of the loan can be used to pay expenses for payroll or other eligible expenses.
- Minimum 60% of funds go to payroll costs
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans given to eligible borrowers qualify for total loan forgiveness if they do so during the 8to 24-week covered period following loan payment:
- Pay and worker levels are kept in the same way in accordance with the First Draw PPP loan
- The loan funds are used on payroll costs and other expenses that are eligible and
- At least 60% of proceeds go to payroll costs
- How to request loan forgiveness and the time to apply
When all of the loan funds have been utilized The borrower may apply to be forgiven. Borrowers are able to apply for forgiveness any time up until the date of maturity of the loan. If they do not file for forgiveness within 10 months after the date of expiration of the period covered and the loan is not renewed, PPP loan payments can no longer deferred and borrowers will begin making monthly payments to their PPP lender.