The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the application process to forgive Paycheck Protection Program loans, along with newly updated and revised forms that comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month and offered $284 billion in funding to small businesses that needed loans. This money was used to offset the economic impact of the coronavirus epidemic. The package also mandated the SBA to issue streamlined forms within 24 days of the legislation being approved by the lawmaker to streamline the process of applying for forgiveness, along with conditions meant to encourage more loans from community banks, specifically for minority-owned businesses who had trouble getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and 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 the enactment of the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published more updated forms.”
First Draw PPP Loan forgiveness terms
Disability Loan Forgiveness – First Draw PPP loans made to eligible borrowers qualify for complete loan forgiveness if they do so within the 8-to 24-week covered period following the loan’s disbursement
- The levels of compensation and employee pay are ensured
- The loan funds are used on payroll expenses and other expenses that are eligible and
- A minimum of 60% of the proceeds are used to pay for payroll expenses
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans to eligible borrowers are eligible for loan forgiveness if the loan is paid within an 8– to 24 week time frame.
- Employee and compensation levels are kept in the same way as required for the First Draw PPP loan
- The loan proceeds could be used to pay payroll costs or other eligible expenses.
- At least 60% of the profits are spent on payroll costs
- When and how do I apply for loan forgiveness?
A borrower may apply for forgiveness once all loan proceeds to which the borrower wants forgiveness have been used. Borrowers may apply for forgiveness at any time until the date of maturity. If they do not file for forgiveness within 10 months after the last day of the covered period and the loan is not renewed, PPP loan payments can not deferred any longer, and borrowers will begin making loan payments to their PPP lender.
Download Disability Loan Forgiveness
Gallery of Disability Loan Forgiveness
