The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the process of applying for the forgiveness of Paycheck Protection Program loans, as well as newly revised and updated forms to comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month that provided $284 billion of funding for small-scale businesses who needed loans. The money was intended to offset the economic impact of the coronavirus pandemic. The law requires that the SBA provide simplified forms within 24 hours after the bill’s passage into law. This was to make it easier to apply for forgiveness. Additionally, it included conditions that would encourage community banks to lend more, especially to minority-owned businesses that had difficulty getting 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 form for PPP loan forgiveness within 24 hours from the date of enactment in 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.”
First Draw PPP Conditions for loan forgiveness
Debt Forgiveness Act 2022 Student Loans – For eligible borrowers First Draw PPP loans can be suitable to forgive loans. This applies when the loan is disbursed within an 8– to 24 week period.
- Pay and worker levels are maintained
- The loan proceeds are spent on payroll and other eligible expenses; and
- Minimum 60% of proceeds go to the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans given to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8– to 24-week duration following the loan’s disbursement
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the identical manner.
- The loan funds are used on payroll and other expenses that are eligible and
- A minimum of 60% of the funds go to payroll costs
- How to request loan forgiveness and the time to apply
A borrower can apply for forgiveness after all loan proceeds for which the borrower wants forgiveness have been used. Borrowers can request forgiveness at any time until the date of maturity. Borrowers who don’t request forgiveness within 10 month after the date they will be able to repay the loan are eligible to receive the loan payment from their PPP lender.