The U.S. Small Business Administration has released a form of one page that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms that are in line with the most recent stimulus legislation.
Congress approved the COVID-19 relief package last month that offered $284 billion in funding to small businesses that needed loans. The funds were used to reduce the economic burden of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within 24 hours of the bill being approved by the lawmaker to streamline the process of applying for forgiveness. The legislation also contained conditions designed to facilitate more bank loans by community banks, particularly for minority-owned companies that struggled to get loans in the past.
“The Small Business Administration met the requirement of releasing the one-page form for PPP loan forgiveness within 24 hours of the date of the enactment of 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 published more updated forms.”
First Draw PPP Conditions for loan forgiveness
Executive Order To Forgive Student Loans – First Draw PPP loans made to eligible borrowers qualify for complete loan forgiveness if they do so during the 8- to 24-week period after loan disbursement:
- It’s the same for compensation and employees.
- The proceeds from the loan may be used to cover payroll costs or other expenses that are eligible.
- A minimum of 60% of the proceeds go to expenses for payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans to eligible borrowers can be qualified for loan forgiveness when the loan is paid within an 8– to 24 week period.
- Pay and worker levels are maintained in the same manner in accordance with the First Draw PPP loan
- The loan funds are used on payroll costs and other eligible expenses; and
- At least 60% of profits go towards payroll costs
- How do I apply for loan forgiveness and when
A borrower can apply for forgiveness after all loan proceeds for which the borrower is requesting forgiveness have been utilized. Borrowers may apply for forgiveness at any time until the loan’s maturity date. Borrowers who do not request forgiveness within 10 months of the expiration date of the loan will be able to receive the loan payment from their PPP lender.
Download Executive Order To Forgive Student Loans
Gallery of Executive Order To Forgive Student Loans
