The U.S. Small Business Administration has released a 1-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. It also includes newly revised forms that are in line with the latest stimulus legislation.
The COVID-19 relief plan that Congress adopted 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. It included a requirement for the SBA to issue simplified forms within 24 days of the legislation being signed into law to simplify the application process for forgiveness. The legislation also contained conditions designed to facilitate more loans from community banks, specifically for minority-owned businesses who were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the requirement to issue the PPP form, which is one page long, for loan forgiveness within 24 days from 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 more updated forms.”
Terms for forgiveness for the initial draw of PPP loans
Income Based Repayment Student Loan Forgiveness – For those who qualify First Draw PPP loans are qualified for loan forgiveness. This happens when the loan is disbursed within an 8 to 24-week period.
- It’s the same for compensation and employees.
- The loan proceeds are used on payroll expenses and other eligible expenses; and
- A minimum of 60% of the funds go to the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans granted to eligible borrowers qualify for full loan forgiveness if during the 8to 24 week time period after loan payment:
- The First Draw PPP loan requires that the compensation and employee levels be maintained in an exactly the same manner.
- The loan funds are used on payroll costs as well as other eligible expenses and
- At least 60% of profits go towards the cost of payroll
- How do I apply for loan forgiveness , and when
The borrower is eligible for forgiveness once the loan’s proceeds for which the borrower wants forgiveness have been utilized. Borrowers may apply for forgiveness at any point up to 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 loan payments from their PPP lender.
Download Income Based Repayment Student Loan Forgiveness
Gallery of Income Based Repayment Student Loan Forgiveness
