Forgivable Loan Form

Forgivable Loan Form

The U.S. Small Business Administration issued a one-page application form aimed at simplifying the application process to forgive Paycheck Protection Program loans, as well as newly updated and revised forms that comply with the most recent stimulus legislation. 

The COVID-19 aid package Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiveness loans to help them cope with the economic fallout of the coronavirus epidemic. The law required that the SBA provide simplified forms within 24 hours after the bill’s passage into law. This was to facilitate the application for forgiveness. It also included conditions to encourage community banks to lend more, especially to minority-owned businesses who were unable to obtain loans last year.

Forgivable Loan Form

“The Small Business Administration met the requirement of releasing the one-page form for PPP loan forgiveness within 24 hours of 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 released additional updated forms.”

Terms for forgiveness for the initial draw of PPP loans

Forgivable Loan Form – For borrowers who are eligible, First Draw PPP loans are suitable to forgive loans. This happens when the loan payment is made within an 8 to 24-week period.

  • The same goes for the pay and benefits for employees.
  • The proceeds from the loan may be used to cover expenses for payroll or other eligible expenses.
  • At least 60% of proceeds go to the cost of payroll

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans to eligible customers are eligible for loan repayment when the loan is repaid within an 8– to 24-week time frame.

  • The First Draw PPP loan requires that the employee and compensation levels be maintained in the identical manner.
  • The loan proceeds could be used to pay the cost of payroll as well as other expenses that are eligible.
  • At least 60% of proceeds are spent on payroll costs
  • How and when to apply for loan forgiveness

Once all of the loan proceeds have been used the borrower is eligible to be forgiven. Borrowers can request forgiveness at any time until the loan’s maturity date. If the borrower does not apply for forgiveness within 10 months of the end of the period covered the PPP loans are not deferred any longer, and the borrower will be required to make loan payments to their PPP lender.

Download Forgivable Loan Form

Gallery of Forgivable Loan Form


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