The U.S. Small Business Administration released a one-page form aimed at simplifying the application process to forgive Paycheck Protection Program loans, together with updated and revised forms to conform to the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief plan last month, which included $284 billion of financing for small-scale businesses who needed loans. The money was intended to offset the economic impact of the coronavirus epidemic. The law requires that the SBA issue simplified forms within the first 24 hours of the signing into law. This was to make it easier to apply for forgiveness. The legislation also contained conditions that encourage banks in the community to lend more particularly to minority-owned businesses that had difficulty getting loans last year.
“The Small Business Administration met the requirement to issue the one page form for loan forgiveness under the PPP within 24 days of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released updated forms.”
First Draw PPP Conditions for loan forgiveness
Examples Of Public Service Jobs For Loan Forgiveness Application Form – First Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if within the 8-to 24 week period that follows loan disbursement:
- Pay and worker levels are maintained
- The loan proceeds are used on payroll expenses and other expenses that are eligible and
- At least 60% of the proceeds are spent on payroll costs
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if during the 8– to 24-week covered period following loan disbursement:
- The First Draw PPP loan requires that the compensation and employee levels are maintained in the identical manner.
- The loan funds can be used to pay for expenses for payroll or other expenses that are eligible.
- At least 60% of proceeds are spent on payroll costs
- When and how do I apply for loan forgiveness?
The borrower is eligible for forgiveness once all loan proceeds for which the borrower wants forgiveness have been utilized. Borrowers may apply for forgiveness at any point up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred and the borrower will be required to make loan payments to their PPP lender.