Government Loan Forgiveness Form

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 that comply with the current stimulus law. 

The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion in funding for small businesses seeking forgiven loans to help to deal with the effects of economic collapse from the coronavirus pandemic. The law required that the SBA release simplified forms within 24 hours of the signing into law. This was done to simplify the process of applying for forgiveness. The legislation also contained conditions that encourage community banks to lend more specifically to minority-owned companies who had a difficult time getting loans last year.

Government Loan Forgiveness Form

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

First Draw PPP Terms of loan forgiveness

Government Loan Forgiveness Form – First Draw PPP loans granted to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8- to 24-week period after loan disbursement:

  • Pay and worker levels are kept at a constant level.
  • The loan funds are used on payroll and other expenses that are eligible and
  • At least 60% of the proceeds are spent on payroll costs

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans to eligible borrowers are eligible for loan forgiveness when the loan is repaid within an 8to 24 week time frame.

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

Once all of the loan funds have been utilized The borrower may apply to be granted forgiveness. Borrowers can request forgiveness at any time until the date of maturity. 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 payment from their PPP lender.

Download Government Loan Forgiveness Form

Gallery of Government Loan Forgiveness Form

Leave a Comment