The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying for the forgiveness of Paycheck Protection Program loans, as well as newly revised and updated forms to meet the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package in the month of March, which included $284 billion of financing to small businesses that needed loans. The funds were used to reduce the economic burden of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within the first 24 hours of the bill being adopted to make the process of applying for forgiveness, along with conditions meant to encourage more loans from community banks, especially for minority-owned businesses who were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the requirement to issue the PPP form, which is one page long, for 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 released updated forms.”
Forgiveness terms in the initial draw of PPP loans
Loan Forgiveness Jobs For Social Workers – For borrowers who are eligible, First Draw PPP loans can be suitable for loan forgiveness. This happens when the loan is disbursed within an 8 to 24-week period.
- The levels of compensation and employee pay are kept at a constant level.
- The loan proceeds can be used to pay for the cost of payroll as well as other expenses that are eligible.
- At least 60% of proceeds go to the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to eligible borrowers are qualified for loan forgiveness when the loan is repaid within an 8– 24 week period.
- Pay and worker levels are maintained in the same way in accordance with the First Draw PPP loan
- The loan funds can be used to pay the cost of payroll as well as other eligible expenses.
- At least 60% of the proceeds are spent on payroll costs
- How do I apply for loan forgiveness , and when to apply
When all of the loan funds have been utilized, a borrower can apply to be granted forgiveness. Borrowers can apply for forgiveness anytime up to the maturity date of the loan. Borrowers who don’t request forgiveness within 10 months of the end date of the loan are eligible to receive payment from their PPP lender.