The U.S. Small Business Administration has released a single-page form that aims to simplify the application process for the forgiveness of Paycheck Protection Program loans, together with revised and updated forms to conform to the requirements of the latest stimulus legislation.
The COVID-19 relief package that Congress approved last month renewed the PPP with $284 billion of funds for small businesses that want forgiven loans to help cope with the economic fallout from the coronavirus outbreak. The legislation required that the SBA issue simplified forms within 24 hours of the signing into law. This was to simplify the process of applying for forgiveness. Additionally, it included conditions that would encourage banks in the community to lend more particularly to minority-owned businesses who had a difficult time getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within the first 24 hours from the date of enactment in the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released more updated forms.”
First Draw PPP Terms of loan forgiveness
Federal Employee Loan Forgiveness Form – First Draw PPP loans made to borrowers who meet the criteria are eligible for complete loan forgiveness if they do so within the 8-to 24 week period that follows the loan’s disbursement
- It’s the same for employee compensation and the.
- The loan funds are used on payroll and other expenses that are eligible and
- Minimum 60% of proceeds go to payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans to qualified borrowers are qualified for loan forgiveness when the loan is paid within an 8to 24 week period.
- Pay and worker levels are maintained in the same way as is required for the First Draw PPP loan
- The loan funds could be used to pay expenses for payroll or other expenses that are eligible.
- Minimum 60% of proceeds go to expenses for payroll
- When and how do I apply for loan forgiveness?
Once all of the loan’s proceeds have been used The borrower may apply for forgiveness. Borrowers may apply for forgiveness at any time until the loan’s maturity date. If the borrower does not apply for forgiveness within 10 years of the date of expiration of the time period that was covered and the loan is not renewed, PPP loan payments are no longer deferred and borrowers must make payment to their PPP lender.