The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the application process for the forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms to conform to the requirements of the latest stimulus legislation.
The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgivable loans to help them deal with the financial fallout from the coronavirus pandemic. It included a requirement for the SBA to issue streamlined forms within 24 days of the bill being signed into law to simplify the process of applying for forgiveness. It also included conditions that aim to increase the number of loans from community banks, particularly for minority-owned companies that struggled to get loans last year.
“The Small Business Administration met the requirement to issue the one page form for loan forgiveness under the PPP within 24 hours of the date of enactment 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.”
First Draw PPP Terms of loan forgiveness
Ecsi Loan Forgiveness Form – For those who qualify, First Draw PPP loans can be suitable to forgive loans. This is when the loan is disbursed within an 8– to 24-week period.
- Pay and worker levels are maintained
- The proceeds from the loan may be used to cover payroll costs or other eligible expenses.
- A minimum of 60% of proceeds are used to pay for payroll expenses
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans given to eligible borrowers qualify for complete loan forgiveness, if within the 8to 24-week time period after the loan’s disbursement
- The First Draw PPP loan requires that the compensation and employee levels be maintained in the identical manner.
- The loan proceeds are used on payroll costs and other eligible expenses; and
- A minimum of 60% of the proceeds are spent on payroll costs
- How do I request loan forgiveness and the time to apply
A borrower can apply for forgiveness only after all loan proceeds to which the borrower is requesting forgiveness have been used. The borrower can request forgiveness anytime up to the maturity date of the loan. If they do not file for forgiveness within 10 months after the last day of the covered period the PPP loan payments can no longer deferred, and the borrower will be required to make loan payments to their PPP lender.