Get On Your Feet Loan Forgiveness Program

Get On Your Feet Loan Forgiveness Program

The U.S. Small Business Administration has issued a one-page form that simplifies the application for the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms to comply with the current stimulus legislation. 

The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgivable loans to help them cope with the economic fallout from the coronavirus pandemic. The law requires that the SBA release simplified forms within 24 hours after the bill’s passage into law. This is to make it easier to apply for forgiveness. The legislation also contained conditions that would encourage community banks to make more loans particularly to minority-owned businesses that had difficulty getting loans last year.

Get On Your Feet Loan Forgiveness Program

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the requirement to issue the one-page PPP form loan forgiveness within the first 24 hours of the date of enactment under the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published updated forms.”

First Draw PPP Conditions for loan forgiveness

Get On Your Feet Loan Forgiveness Program – First Draw PPP loans made to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8- to 24-week covered period following the loan’s disbursement

  • The levels of compensation and employee pay are ensured
  • The loan funds are used on payroll costs as well as other expenses eligible for reimbursement; and
  • At least 60% of the proceeds are used for the cost of payroll

Second Draw PPP Conditions for loan forgiveness

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

  • Pay and worker levels are kept in the same way in accordance with the First Draw PPP loan
  • The loan proceeds are spent on payroll expenses and other eligible expenses; and
  • A minimum of 60% of the proceeds are spent on payroll costs
  • What is the best time to apply for loan forgiveness

A borrower may apply for forgiveness once all loan proceeds to which the borrower is requesting forgiveness have been used. Borrowers are able to apply for forgiveness at any time prior until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 month after the date they will be able to repay the loan are able to receive loan payments from their PPP lender.

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