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 is also updated with new forms that are in line with the current stimulus legislation.
The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion in funding for small businesses seeking forgivable loans to help them deal with the financial fallout from the coronavirus pandemic. The legislation required that the SBA issue simplified forms within 24 hours of the signing into law. This was to simplify the process of applying for forgiveness. The legislation also contained conditions that encourage community banks to lend more particularly to minority-owned businesses who were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for loan forgiveness within 24 hours of the date of enactment under the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released additional updated forms.”
First Draw PPP Loan forgiveness terms
Jose P Loan Forgiveness Program – For borrowers who are eligible First Draw PPP loans can be qualified for loan forgiveness. This happens if the loan disbursement occurs within an 8 to 24-week period.
- It’s the same for employee compensation and the.
- The proceeds of the loan can be used to cover expenses for payroll or other expenses that are eligible.
- A minimum of 60% of the profits are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans made to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8to 24 week duration following loan payment:
- Pay and worker levels are maintained 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 proceeds are used for the cost of payroll
- How to apply for loan forgiveness , and when to apply
After all loan proceeds have been used the borrower is eligible to be granted forgiveness. Borrowers can request forgiveness at any point up to the loan’s maturity date. 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 the loan payment from their PPP lender.