The U.S. Small Business Administration has issued a one-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the current stimulus legislation.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion in funding for small businesses seeking forgiven loans to help cope with the economic fallout of the coronavirus epidemic. The law requires that the SBA provide simplified forms within the first 24 hours of the legislation’s signing into law. This was to facilitate the application for forgiveness. Additionally, it included conditions that would encourage banks in the community to lend more specifically to minority-owned companies that had difficulty getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and stated that the Small Business Administration fulfilled the obligation to issue the one-page PPP form loan forgiveness within 24 days from 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 released new forms.”
Forgiveness terms for the initial draw of PPP loans
Does Working For The Va Qualify For Student Loan Forgiveness – For those who qualify First Draw PPP loans can be suitable to be forgiven. This is when the loan is disbursed within an 8 to 24-week period.
- Pay and worker levels are ensured
- The loan proceeds are used on payroll expenses and other eligible expenses; and
- A minimum of 60% of the proceeds go to expenses for payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to qualified customers are qualified for loan forgiveness when the loan is paid within an 8– to 24-week period.
- Pay and worker levels are kept in the same way as required for the First Draw PPP loan
- The proceeds of the loan can be used to pay for expenses for payroll or other expenses that are eligible.
- Minimum 60% of proceeds go to expenses for payroll
- How do I request loan forgiveness and the time to apply
A borrower can apply for forgiveness after all loan proceeds for which the borrower is requesting forgiveness have been used. The borrower can request forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the date they will be able to repay the loan are able to receive payment from their PPP lender.
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