The U.S. Small Business Administration released a one-page form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, along with newly updated and revised forms to conform to the requirements of the most recent stimulus legislation.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion in funds for small businesses that want forgiveness loans to help them deal with the financial fallout from the coronavirus outbreak. The package also mandated the SBA to issue simplified forms within 24 days of the legislation being adopted to make the procedure of applying for forgiveness. The legislation also contained conditions meant to encourage more bank loans by community banks, especially for minority-owned companies that struggled to get loans in the past.
“The Small Business Administration met the requirement to issue the single-page form for the forgiveness of PPP loans within 24 days of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued the updated forms.”
First Draw PPP Conditions for loan forgiveness
How To Apply For Devry Student Loan Forgiveness – First Draw PPP loans given to borrowers who are eligible can be granted complete loan forgiveness if they do so during the 8- to 24-week covered period following the disbursement of loan:
- The same goes for the pay and benefits for employees.
- The loan proceeds are used on payroll costs and other expenses that are eligible and
- A minimum of 60% of proceeds are used for the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans for eligible borrowers 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 exact same way.
- The loan funds can be used to cover payroll costs or other eligible expenses.
- A minimum of 60% of the proceeds are spent on payroll costs
- How to apply for loan forgiveness and when
A borrower can apply for forgiveness once all loan proceeds to which the borrower is requesting forgiveness have been used. The borrower can request forgiveness anytime up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months of the end of the time period that was covered, then PPP loan payments are no longer deferred, and borrowers must make payment to their PPP lender.