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, together with revised and updated forms to comply with the most recent stimulus legislation.
The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion of funding for small businesses seeking forgiven loans to help to deal with the effects of economic collapse of the coronavirus epidemic. The legislation required that the SBA release simplified forms within the first 24 hours after the bill’s passage into law. This was done to facilitate the application for forgiveness. The legislation also contained conditions that would encourage banks in the community to lend more, especially to minority-owned businesses who had a difficult time getting loans last year.
“The Small Business Administration met the requirement of releasing the one-page form for loan forgiveness under the PPP 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 issued updated forms.”
Forgiveness terms for the first draw of PPP loans
Devry Loan Forgiveness 2022 – First Draw PPP loans granted to borrowers who meet the criteria are eligible for full loan forgiveness if within the 8-to 24 week period that follows the disbursement of loan:
- It’s the same for employee compensation and the.
- The loan proceeds are spent on payroll costs and other expenses that are eligible and
- At least 60% of proceeds are used for the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to qualified customers are eligible for loan forgiveness if the loan is paid within an 8– to 24 week time frame.
- Pay and worker levels are maintained in the same way as required for the First Draw PPP loan
- The loan proceeds are used on payroll and other eligible expenses; and
- Minimum 60% of profits go towards payroll costs
- How and when to apply for loan forgiveness?
A borrower can apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been utilized. The borrower can request forgiveness anytime up until the date of maturity of the loan. If they do not file for forgiveness within 10 months after the last day of the time period that was covered, then PPP loan payments can not deferred any longer, and borrowers will begin making payment to their PPP lender.