Exemplary Assistance Loan Forgiveness Program

The U.S. Small Business Administration has released a single-page form aimed at simplifying the process of applying for forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms to comply with the most recent stimulus legislation. 

The COVID-19 aid package Congress passed last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiveness loans to help them cope with the economic fallout from the coronavirus pandemic. It included a requirement for the SBA to issue streamlined forms within 24 hours after the legislation was signed into law to simplify the process of applying for forgiveness. It also included conditions designed to facilitate more bank loans by community banks, particularly for minority-owned companies that struggled to get loans in the past.

Exemplary Assistance Loan Forgiveness Program

“The Small Business Administration met the requirements to release the one-page form for PPP loan forgiveness within 24 hours of the date of 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 issued the updated forms.”

Terms for forgiveness for the initial draw of PPP loans

Exemplary Assistance Loan Forgiveness Program – For borrowers who are eligible, First Draw PPP loans can be suitable to forgive loans. This happens when the loan is disbursed within an 8 to 24 week period.

  • Employee and compensation levels are maintained
  • The loan proceeds are spent on payroll costs as well as other expenses eligible for reimbursement; and
  • Minimum 60% of funds go to payroll costs

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans to eligible customers are eligible for loan forgiveness if the loan is paid within an 8to 24-week time frame.

  • The First Draw PPP loan requires that the employee and compensation levels are maintained in the exactly the same manner.
  • The proceeds of the loan could be used to pay for payroll costs or other eligible expenses.
  • At least 60% of proceeds go to expenses for payroll
  • How to apply for loan forgiveness and the time to apply

After all loan funds have been utilized The borrower may apply to be granted forgiveness. Borrowers are able to apply for forgiveness any time up to the maturity date of the loan. If the borrower does not apply for forgiveness within 10 months of the end of the covered period and the loan is not renewed, PPP loan payments are no longer deferred and the borrower will be required to make loan payments to their PPP lender.

Download Exemplary Assistance Loan Forgiveness Program

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