The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the application process for the forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to comply with the most recent stimulus legislation.
The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgiveness loans to help them to deal with the effects of economic collapse from the coronavirus outbreak. The law requires that the SBA issue simplified forms within 24 hours of the legislation’s signing into law. This is to facilitate the application for forgiveness. The legislation also contained conditions to encourage community banks to lend more specifically to minority-owned companies who had a difficult time getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within 24 days from 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 issued more updated forms.”
First Draw PPP Loan forgiveness terms
Is It Possible To Get Student Loan Forgiveness – First Draw PPP loans granted to borrowers who are eligible can be granted complete loan forgiveness if they do so within the 8-to 24-week covered period following the loan’s disbursement
- Employee and compensation levels are ensured
- The loan proceeds can be used to cover payroll costs or other eligible expenses.
- At least 60% of profits are used for 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 duration following the loan’s disbursement
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in the exact same way.
- The loan proceeds are spent on payroll and other expenses that are eligible and
- A minimum of 60% of proceeds are used to pay for payroll expenses
- When and how do I apply for loan forgiveness
The borrower is eligible for forgiveness after all loan proceeds to which the borrower wants forgiveness have been used. The borrower can apply for forgiveness at any time until the date of maturity. Borrowers who do not request forgiveness within 10 months of the expiration date of the loan are eligible to receive the loan payment from their PPP lender.