The U.S. Small Business Administration issued a one-page application form aimed at simplifying the application process to forgive Paycheck Protection Program loans, together with revised and updated forms to meet the requirements of the most recent stimulus legislation.
Congress approved the COVID-19 relief package last month that offered $284 billion in funding for small-scale businesses who needed loans. This money was used to reduce the economic burden of the coronavirus pandemic. It also included a requirement that the SBA to issue simplified forms within 24 days of the bill being approved by the lawmaker to streamline the procedure of applying for forgiveness. It also included conditions that aim to increase the number of bank loans by community banks, particularly for minority-owned businesses who were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the requirement to publish the one-page PPP form loan forgiveness within 24 hours from the date of enactment in the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released more updated forms.”
First Draw PPP Loan forgiveness terms
Does The Army Forgive Student Loans – First Draw PPP loans given 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
- This is also true for pay and benefits for employees.
- The loan proceeds are used on payroll costs as well as other expenses eligible for reimbursement; and
- Minimum 60% of proceeds go to expenses for payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans made to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8– to 24-week covered period following loan payment:
- Pay and worker levels are maintained in the same way as required for the First Draw PPP loan
- The loan funds are used on payroll costs and other expenses that are eligible and
- At least 60% of funds go to the cost of payroll
- What is the best time to apply for loan forgiveness
When all of the loan’s proceeds have been used The borrower may apply for forgiveness. Borrowers are able to apply for forgiveness at any time prior to the maturity date of the loan. If they do not file for forgiveness within 10 months after the end of the covered period, then PPP loans are no longer deferred and the borrower will be required to make payment to their PPP lender.
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