The U.S. Small Business Administration has released a single-page form aimed at simplifying the process of applying to forgive Paycheck Protection Program loans, along with newly updated and revised forms to conform to the requirements of the most recent stimulus legislation.
The COVID-19 relief package that Congress adopted 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 the first 24 hours after the legislation was signed into law to simplify the application process for forgiveness. The legislation also contained conditions that aim to increase the number of bank loans by community banks, especially for minority-owned businesses that had trouble getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and stated that the Small Business Administration fulfilled the requirement to issue the PPP form, which is one page long, for loan forgiveness within 24 days of the date of enactment under the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released new forms.”
Terms for forgiveness for the initial draw of PPP loans
Federal College Loan Forgiveness Program – First Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness within the 8 to 24-week covered period following the loan’s disbursement
- The levels of compensation and employee pay are kept at a constant level.
- The loan proceeds can be used to pay the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of the profits are spent on payroll costs
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans granted to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8to 24-week covered period following loan disbursement:
- The First Draw PPP loan requires that the employee and compensation levels be maintained in the identical manner.
- The loan funds are used on payroll expenses and other expenses that are eligible and
- Minimum 60% of funds go to the cost of payroll
- How do I apply for loan forgiveness , and when to apply
After all loan funds have been utilized The borrower may apply to be forgiven. Borrowers are able to apply for forgiveness anytime up to the maturity date of the loan. Borrowers who don’t request forgiveness within 10 month of the expiration date of the loan are eligible to receive the loan payment from their PPP lender.
Download Federal College Loan Forgiveness Program
Gallery of Federal College Loan Forgiveness Program
