The U.S. Small Business Administration released a one-page form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, along with newly updated and revised forms that conform to the requirements of the most recent stimulus legislation.
The COVID-19 relief package that Congress adopted last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgivable loans to help them cope with the economic fallout of the coronavirus epidemic. It included a requirement for the SBA to issue streamlined forms within 24 days of the bill being signed into law to simplify the process of applying for forgiveness. It also included conditions meant to encourage more bank loans by community banks, specifically for minority-owned businesses that struggled to get loans last year.
“The Small Business Administration met the requirements to release the one page form for PPP loan forgiveness within 24 days of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released updated forms.”
First Draw PPP Terms of loan forgiveness
Itt Tech Loan Forgiveness 2022 – First Draw PPP loans granted to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8- to 24-week covered period following the loan’s disbursement
- Employee and compensation levels are maintained
- The loan proceeds can be used to pay expenses for payroll or other eligible expenses.
- Minimum 60% of proceeds go to expenses for payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans given to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8to 24-week duration following loan disbursement:
- The First Draw PPP loan requires that the compensation and employee levels be maintained in the exactly the same manner.
- The loan proceeds are spent on payroll as well as other eligible expenses and
- At least 60% of proceeds go to payroll costs
- How and when to apply for loan forgiveness
A borrower may apply for forgiveness once the loan’s proceeds for which the borrower wants forgiveness have been used. Borrowers can apply for forgiveness any time up until the date of maturity of the loan. If the borrower does not apply for forgiveness within 10 months after the date of expiration of the time period that was covered the PPP loan payments can no longer deferred and borrowers will begin making loan payments to their PPP lender.
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