The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the application process for forgiveness of Paycheck Protection Program loans, together with revised and updated forms to meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package last month that provided $284 billion of funding for small-scale businesses who needed loans. The funds were used to offset the economic impact of the coronavirus epidemic. It included a requirement for the SBA to issue streamlined forms within 24 days of the bill being approved by the lawmaker to streamline the application process for forgiveness. It also included conditions meant to encourage more loans from community banks, particularly for minority-owned companies that struggled to get loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the requirement to issue the PPP form, which is one page long, for loan forgiveness within 24 days of the date of enactment in the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published updated forms.”
Terms for forgiveness for the first draw of PPP loans
Full Sail University Loan Forgiveness – First Draw PPP loans granted to eligible borrowers qualify for full loan forgiveness if within the 8 to 24 week period that follows the disbursement of loan:
- The same goes for the employee compensation and the.
- The loan funds are used on payroll and other expenses that are eligible and
- A minimum of 60% of the funds go to expenses for payroll
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans for eligible customers are eligible for loan forgiveness if the loan is paid within an 8– 24-week period.
- The First Draw PPP loan requires that the employee and compensation levels are maintained in the identical manner.
- The loan funds can be used to pay for payroll costs or other eligible expenses.
- At least 60% of proceeds go to the cost of payroll
- How to apply for loan forgiveness , and when
A borrower may apply for forgiveness once all loan proceeds for which the borrower has applied for forgiveness have been used. The borrower can request forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the end of the period covered the PPP loan payments are no longer deferred, and borrowers will begin making monthly payments to their PPP lender.