The U.S. Small Business Administration has released a form of one page that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the most recent stimulus law.
The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion in funds for small businesses that want forgiveness loans to help them cope with the economic fallout of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within 24 days of the bill being adopted to make the application process for forgiveness, along with conditions meant to encourage more loans from community banks, specifically for minority-owned companies that were unable to obtain loans in the past.
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 days of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published more updated forms.”
First Draw PPP Conditions for loan forgiveness
How To Get Ppp Loan Forgiveness – First Draw PPP loans granted to borrowers who are eligible can be granted total loan forgiveness within the 8-to 24-week covered period following loan disbursement:
- Employee and compensation levels are ensured
- The loan proceeds can be used to pay for the cost of payroll as well as other eligible expenses.
- Minimum 60% of profits go towards the cost of payroll
Second Draw PPP Loan Forgiveness Conditions
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 the compensation levels be maintained in an identical manner.
- The loan funds are used on payroll and other expenses that are eligible and
- At least 60% of proceeds go to the cost of payroll
- When and how do I apply for loan forgiveness
When all of the loan proceeds have been used The borrower may apply to be forgiven. Borrowers can request forgiveness at any point up to the date of maturity. If they do not file for forgiveness within 10 months of the end of the period covered, then PPP loan payments are no longer deferred and borrowers must make payment to their PPP lender.