The U.S. Small Business Administration released a one-page form aimed at simplifying the application process to forgive Paycheck Protection Program loans, as well as newly updated and revised forms that conform to the requirements of the most recent stimulus legislation.
The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiveness loans to help them deal with the financial fallout of the coronavirus epidemic. The law requires that the SBA provide simplified forms within the first 24 hours of the signing into law. This was done to facilitate the application for forgiveness. The legislation also contained conditions to encourage community banks to lend more particularly to minority-owned businesses who had a difficult time getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the obligation to issue the PPP form, which is one page long, for loan forgiveness within 24 hours from the date of the enactment of 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 the updated forms.”
First Draw PPP Conditions for loan forgiveness
Gibbs College Student Loan Forgiveness – For borrowers who are eligible, First Draw PPP loans are suitable for loan forgiveness. This happens when the loan payment is made within an 8– to 24 week period.
- This is also true for pay and benefits for employees.
- The loan proceeds are spent on payroll expenses and other eligible expenses; and
- A minimum of 60% of proceeds are used to pay for payroll expenses
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans to qualified borrowers can be eligible for loan repayment if the loan is paid within an 8– to 24-week period.
- Employee and compensation levels are kept in the same way as is required for the First Draw PPP loan
- The loan proceeds are used on payroll costs and other expenses that are eligible and
- At least 60% of the profits are used for the cost of payroll
- When and how do I apply for loan forgiveness
A borrower can apply for forgiveness only after all loan proceeds to which the borrower has applied for forgiveness have been used. Borrowers can apply for forgiveness any time up until the date of maturity of the loan. Borrowers who don’t request forgiveness within 10 month after the date they will be able to repay the loan will be able to receive loan payments from their PPP lender.