The U.S. Small Business Administration has released a form of one page that simplifies the application for forgiveness of Paycheck Protection Program loans. It also includes newly revised forms that comply with the latest stimulus law.
Congress approved the COVID-19 relief package in the month of March that included $284 billion of financing to small businesses in need of loans. The funds were used 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 adopted to make the application process for forgiveness. The legislation also contained conditions that aim to increase the number of loans from community banks, especially for minority-owned businesses that had trouble getting loans in the past.
“The Small Business Administration met the requirements to release the single-page form for PPP loan forgiveness within 24 days of the date of the enactment of 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 published updated forms.”
First Draw PPP Terms of loan forgiveness
Current Student Loan Forgiveness – For borrowers who are eligible First Draw PPP loans are qualified for loan forgiveness. This is when the loan is disbursed within an 8– to 24-week timeframe.
- Pay and worker levels are kept at a constant level.
- The loan proceeds are used on payroll expenses as well as other expenses eligible for reimbursement; and
- Minimum 60% of funds go to the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to qualified borrowers can be eligible for loan repayment when the loan is paid within an 8to 24 week period.
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in the exact same way.
- The loan proceeds are used on payroll expenses and other eligible expenses; and
- Minimum 60% of funds go to the cost of payroll
- What is the best time to apply for loan forgiveness
A borrower may apply for forgiveness only after the loan’s proceeds for which the borrower wants forgiveness have been utilized. Borrowers can request forgiveness at any time until the date of maturity. If borrowers do not apply for forgiveness within 10 years of the last day of the covered period and the loan is not renewed, PPP loan payments can no longer deferred and borrowers must make loan payments to their PPP lender.
Download Current Student Loan Forgiveness
Gallery of Current Student Loan Forgiveness
