The U.S. Small Business Administration issued a one-page application form that aims to simplify the application process for the forgiveness of Paycheck Protection Program loans, together with revised and updated forms to conform to the requirements of the most recent stimulus legislation.
Congress approved the COVID-19 relief package last month and provided $284 billion of funding to small businesses that needed loans. This money was used to reduce the economic burden of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within 24 hours of the legislation being approved by the lawmaker to streamline the application process for forgiveness, along with conditions designed to facilitate more bank loans by community banks, especially for minority-owned businesses that had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs wrote that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within the first 24 hours of the date of enactment under the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released new forms that were updated.”
First Draw PPP Conditions for loan forgiveness
Cps Loan Forgiveness – First Draw PPP loans given to borrowers who meet the criteria are eligible for complete loan forgiveness if they do so within the 8 to 24-week covered period following the loan’s disbursement
- It’s the same for pay and benefits for employees.
- The proceeds from the loan may be used to cover payroll costs or other expenses that are eligible.
- At least 60% of profits are spent on payroll costs
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans given to borrowers who are eligible can be granted complete loan forgiveness, if within the 8to 24 week covered period following the loan’s disbursement
- The First Draw PPP loan requires that the compensation and employee levels are maintained in the exact same way.
- The loan proceeds could be used to cover the cost of payroll as well as other eligible expenses.
- A minimum of 60% of the profits go towards expenses for payroll
- How to apply for loan forgiveness and when to apply
When all of the loan funds have been utilized, a borrower can apply to be forgiven. Borrowers can apply for forgiveness any time up to the maturity date of the loan. Borrowers who don’t request forgiveness within 10 month of the end date of the loan are eligible to receive payment from their PPP lender.