The U.S. Small Business Administration has released a single-page form that aims to simplify the application process to forgive Paycheck Protection Program loans, along with newly updated and revised forms to conform to the requirements of the most recent stimulus legislation.
Congress approved the COVID-19 relief package in the month of March that provided $284 billion of funding to small businesses that needed loans. This money was used to offset the economic impact of the coronavirus outbreak. It also included a requirement that the SBA to issue simplified forms within 24 days after the legislation was signed into law to simplify the process of applying for forgiveness. The legislation also contained conditions designed to facilitate more bank loans by community banks, particularly for minority-owned businesses that had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the requirement to publish the one-page PPP form loan forgiveness within 24 hours of 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 released the updated forms.”
First Draw PPP Loan forgiveness terms
How To Apply For Veteran Student Loan Forgiveness – For borrowers who are eligible First Draw PPP loans are eligible to be forgiven. This happens when the loan is disbursed within an 8– to 24-week timeframe.
- The levels of compensation and employee pay are maintained
- The loan funds are used on payroll expenses and other expenses that are eligible and
- A minimum of 60% of the proceeds go to payroll costs
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans for eligible customers are qualified for loan forgiveness when the loan is repaid within an 8– 24 week period.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in the exactly the same manner.
- The loan funds are used on payroll expenses and other eligible expenses; and
- At least 60% of profits are used to pay for payroll expenses
- What is the best time to apply for loan forgiveness?
A borrower can apply for forgiveness after all loan proceeds to which the borrower has applied for forgiveness have been utilized. The borrower can apply for forgiveness at any time up to the date at which the loan matures. Borrowers who do not request forgiveness within 10 months of the end date of the loan are able to receive loan payments from their PPP lender.