The U.S. Small Business Administration has released a form of one page which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms to comply with the latest stimulus legislation.
The COVID-19 aid package Congress approved last month renewed the PPP with $284 billion of funding for small businesses seeking forgiveness loans to help them deal with the financial fallout from the coronavirus pandemic. It also included a requirement that the SBA to issue streamlined forms within 24 days after the legislation was adopted to make the application process for forgiveness. The legislation also contained conditions that aim to increase the number of loans from community banks, specifically for minority-owned businesses who had trouble getting loans last year.
“The Small Business Administration met the requirements to release the single-page form for the forgiveness of PPP loans by 24 days after 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.”
First Draw PPP Conditions for loan forgiveness
Itt Tech Former Students Loan Forgiveness – For borrowers who are eligible First Draw PPP loans can be qualified to be forgiven. This is if the loan disbursement occurs within an 8 to 24 week period.
- Pay and worker levels are maintained
- The loan proceeds can be used to cover expenses for payroll or other expenses that are eligible.
- A minimum of 60% of proceeds are spent on payroll costs
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans given to borrowers who are eligible can be granted 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 the exact same way.
- The loan proceeds are used on payroll as well as other eligible expenses and
- At least 60% of proceeds go to expenses for payroll
- What is the best time to apply for loan forgiveness
A borrower may apply for forgiveness only after all loan proceeds to which the borrower wants forgiveness have been utilized. The borrower can apply for forgiveness at any point up to the date of maturity. Borrowers who do not request forgiveness within 10 month of the end date of the loan will be able to receive the loan payment from their PPP lender.