The U.S. Small Business Administration released a one-page form that aims to simplify the process of applying for forgiveness of Paycheck Protection Program loans, as well as newly revised and updated forms to conform to the requirements of the latest stimulus legislation.
The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiven loans to help deal with the financial fallout from the coronavirus pandemic. It also included a requirement that the SBA to issue streamlined forms within 24 hours of the bill being signed into law to simplify the process of applying for forgiveness, along with conditions meant to encourage more loans from community banks, specifically for minority-owned businesses 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 by 24 days after the date of enactment 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 published the updated forms.”
First Draw PPP Loan forgiveness terms
Federal Student Loan Forgiveness For Teachers Application – For borrowers who are eligible First Draw PPP loans can be qualified to be forgiven. This is if the loan disbursement occurs within an 8– to 24 week period.
- The same goes for the employee compensation and the.
- The loan proceeds are spent on payroll costs and other expenses that are eligible and
- A minimum of 60% of the proceeds are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans made to borrowers who are eligible can be granted complete loan forgiveness, if within the 8to 24-week time period after loan disbursement:
- Pay and worker levels are maintained in the same way as required for the First Draw PPP loan
- The loan proceeds are spent on payroll costs as well as other eligible expenses and
- A minimum of 60% of the funds go to expenses for payroll
- How to apply for loan forgiveness and the time to apply
Once all of the loan funds have been utilized the borrower is eligible for forgiveness. Borrowers can request forgiveness at any point up to the date at which the loan matures. Borrowers who do not request forgiveness within 10 month after the date they will be able to repay the loan will be able to receive payment from their PPP lender.