The U.S. Small Business Administration has released a single-page form aimed at simplifying the application process for forgiveness of Paycheck Protection Program loans, as well as newly revised and updated forms to meet the requirements of the latest stimulus legislation.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion in financing for small-scale businesses looking for forgiven loans to help to deal with the effects of economic collapse from the coronavirus pandemic. The package also mandated the SBA to issue simplified forms within 24 days of the legislation being signed into law to simplify the procedure of applying for forgiveness, along with conditions that aim to increase the number of loans from community banks, particularly for minority-owned companies that had trouble getting loans last year.
“The Small Business Administration met the requirements to release the single-page form for the forgiveness of PPP loans by 24 days after the date of 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 released new forms that were updated.”
Forgiveness terms for the first draw of PPP loans
Deadline For Ppp Loan Forgiveness – First Draw PPP loans made to borrowers who are eligible can be granted total loan forgiveness within the 8 to 24-week covered period following loan disbursement:
- The levels of compensation and employee pay are maintained
- The loan proceeds are used on payroll expenses as well as other expenses eligible for reimbursement; and
- Minimum 60% of proceeds go to the cost of payroll
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans for eligible borrowers can be qualified for loan forgiveness when the loan is paid within an 8to 24-week time frame.
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the exact same way.
- The loan proceeds can be used to cover expenses for payroll or other eligible expenses.
- Minimum 60% of profits go towards expenses for payroll
- How do I apply for loan forgiveness , and the time to apply
The borrower is eligible for forgiveness only after all loan proceeds for which the borrower is requesting forgiveness have been used. Borrowers are able to apply for forgiveness anytime up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the date of expiration of the covered period and the loan is not renewed, PPP loans are no longer deferred, and borrowers must make monthly payments to their PPP lender.
Download Deadline For Ppp Loan Forgiveness
Gallery of Deadline For Ppp Loan Forgiveness
