The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the latest stimulus legislation.
Congress approved the COVID-19 relief plan last month, which offered $284 billion in funding to small businesses that needed loans. The money was intended to reduce the economic burden of the coronavirus pandemic. It included a requirement for the SBA to issue streamlined forms within the first 24 hours of the legislation being adopted to make the application process for forgiveness. The legislation also contained conditions designed to facilitate more bank loans by community banks, particularly for minority-owned companies that were unable to obtain loans in the past.
“The Small Business Administration met the requirements to release 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, a partner with 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
Florida Nursing Loan Forgiveness – For borrowers who are eligible First Draw PPP loans can be eligible for loan forgiveness. This happens when the loan is disbursed within an 8– to 24 week period.
- It’s the same for pay and benefits for employees.
- The proceeds from the loan may be used to pay for expenses for payroll or other eligible expenses.
- A minimum of 60% of the proceeds go to the cost of payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans for eligible customers are eligible for loan forgiveness when the loan is repaid within an 8to 24 week time frame.
- The levels of compensation and employee pay are kept in the same way as required for the First Draw PPP loan
- The proceeds of the loan could be used to cover payroll costs or other expenses that are eligible.
- Minimum 60% of proceeds go to payroll costs
- How to apply for loan forgiveness , and when
The borrower is eligible for forgiveness only after the loan’s proceeds for which the borrower has applied for forgiveness have been used. Borrowers are able to apply for forgiveness anytime up until the date of maturity of the loan. If the borrower does not apply for forgiveness within 10 months of the date of expiration of the period covered, then PPP loans are no longer deferred, and borrowers will begin making payment to their PPP lender.