The U.S. Small Business Administration has released a form of one page which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that comply with the latest stimulus legislation.
Congress approved the COVID-19 relief plan last month, which provided $284 billion of funding for small-scale businesses who needed loans. The money was intended to offset the economic impact of the coronavirus outbreak. It also included a requirement that the SBA to issue streamlined forms within the first 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, specifically for minority-owned businesses who were unable to obtain loans in the past.
“The Small Business Administration met the requirement of releasing the one page form for the forgiveness of PPP loans within 24 days of the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released the updated forms.”
First Draw PPP Conditions for loan forgiveness
First Choice Financial Student Loan Forgiveness – First Draw PPP loans given to eligible borrowers qualify for total loan forgiveness during the 8- to 24-week period after the disbursement of loan:
- It’s the same for employee compensation and the.
- The proceeds from the loan may be used to pay the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of profits are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans made to eligible borrowers qualify for total loan forgiveness if they do so during the 8to 24-week time period after loan payment:
- The First Draw PPP loan requires that the employee and compensation levels be maintained in an exact same way.
- The loan funds can be used to cover expenses for payroll or other eligible expenses.
- Minimum 60% of funds go to expenses for payroll
- How do I apply for loan forgiveness and when to apply
A borrower can apply for forgiveness only after all loan proceeds for which the borrower has applied for forgiveness have been used. Borrowers can request forgiveness at any time up to the date at which the loan matures. Borrowers who don’t request forgiveness within 10 month of the expiration date of the loan are able to receive the loan payment from their PPP lender.