Health Care Loan Forgiveness Program

Health Care Loan Forgiveness Program

The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying for forgiveness of Paycheck Protection Program loans, together with updated and revised forms that conform to the requirements of the latest stimulus legislation. 

Congress approved the COVID-19 relief package in the month of March, which included $284 billion of financing for small-scale businesses who needed loans. This money was used to mitigate the economic effects of the coronavirus pandemic. It also included a requirement that the SBA to issue streamlined forms within the first 24 hours of the bill being adopted to make the application process for forgiveness, along with conditions meant to encourage more bank loans by community banks, specifically for minority-owned businesses who had trouble getting loans last year.

Health Care Loan Forgiveness Program

“The Small Business Administration met the requirement of releasing the one page form for PPP loan forgiveness within 24 days of the date of enactment of 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 released more updated forms.”

Terms for forgiveness for the first draw of PPP loans

Health Care Loan Forgiveness Program – For eligible borrowers, First Draw PPP loans are eligible for loan forgiveness. This applies 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 expenses that are eligible and
  • A minimum of 60% of proceeds are used for the cost of payroll

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans granted to borrowers who are eligible can be granted complete loan forgiveness, if within the 8to 24-week time period after loan payment:

  • The First Draw PPP loan requires that the compensation and employee levels be maintained in the exactly the same manner.
  • The loan proceeds are spent on payroll costs as well as 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?

When all of the loan funds have been utilized The borrower may apply to be forgiven. Borrowers are able to apply for forgiveness anytime up to the maturity date of the loan. Borrowers who don’t request 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.

Download Health Care Loan Forgiveness Program

Gallery of Health Care Loan Forgiveness Program