Form For Loan Forgiveness

The U.S. Small Business Administration has issued a one-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms to comply with the latest stimulus law. 

Congress approved the COVID-19 relief package last month and included $284 billion of financing for small-scale businesses who needed loans. This money was used to offset the economic impact of the coronavirus pandemic. The law required that the SBA provide simplified forms within the first 24 hours of the signing into law. This was to make it easier to apply for forgiveness. The legislation also contained conditions to encourage community banks to make more loans, especially to minority-owned businesses that had difficulty getting loans in the past.

Form For Loan Forgiveness

“The Small Business Administration met the requirement to issue 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 with Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued new forms.”

First Draw PPP Conditions for loan forgiveness

Form For Loan Forgiveness – First Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if during the 8- to 24-week covered period following the loan’s disbursement

  • The same goes for the employee compensation and the.
  • The proceeds of the loan can be used to cover the cost of payroll as well as other eligible expenses.
  • A minimum of 60% of the proceeds are used for the cost of payroll

Second Draw PPP Terms of Loan Forgiveness

Second Draw PPP loans for eligible customers are eligible for loan forgiveness when the loan is paid within an 8 24 week period.

  • Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan
  • The loan proceeds are spent on payroll expenses and other eligible expenses; and
  • Minimum 60% of proceeds go to expenses for payroll
  • How do I request loan forgiveness and when to apply

The borrower is eligible for forgiveness once all loan proceeds for which the borrower has applied for forgiveness have been used. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If they do not file for forgiveness within 10 months after the end of the period covered and the loan is not renewed, PPP loans are not deferred any longer, and borrowers will begin making monthly payments to their PPP lender.

Download Form For Loan Forgiveness

Gallery of Form For Loan Forgiveness

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