The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the process of applying to forgive Paycheck Protection Program loans, together with updated and revised forms that comply with the latest stimulus legislation.
Congress approved the COVID-19 relief plan last month and offered $284 billion in funding to small businesses in need of loans. The funds were used to reduce the economic burden of the coronavirus outbreak. It also included a requirement that the SBA to issue streamlined forms within the first 24 hours of the legislation being approved by the lawmaker to streamline the application process for forgiveness. The legislation also contained conditions designed to facilitate more bank loans by community banks, especially for minority-owned businesses who struggled to get loans last year.
“The Small Business Administration met the requirement of releasing the single-page form for loan forgiveness under the PPP within 24 hours 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 new forms that were updated.”
First Draw PPP Conditions for loan forgiveness
Income Based Student Loan Forgiveness – For borrowers who are eligible, First Draw PPP loans are suitable for loan forgiveness. This is when the loan payment is made within an 8 to 24-week period.
- This is also true for employee compensation and the.
- The proceeds from the loan may be used to pay for payroll costs or other eligible expenses.
- At least 60% of profits are spent on payroll costs
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans made to eligible borrowers qualify for complete loan forgiveness, if within the 8to 24 week covered period following loan payment:
- Employee and compensation levels are kept in the same way in accordance with the First Draw PPP loan
- The loan proceeds are used on payroll and other eligible expenses; and
- A minimum of 60% of the profits go towards the cost of payroll
- What is the best time to apply for loan forgiveness
The borrower is eligible for forgiveness after all loan proceeds to which the borrower wants forgiveness have been utilized. Borrowers can request forgiveness at any time until the loan’s maturity date. Borrowers who do not request forgiveness within 10 months of the end date of the loan are able to receive payment from their PPP lender.
Download Income Based Student Loan Forgiveness
Gallery of Income Based Student Loan Forgiveness
