The U.S. Small Business Administration has released a form of one page that simplifies the application for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the latest stimulus law.
The COVID-19 relief package that Congress approved last month renewed the PPP with $284 billion of funds for small businesses that want forgiveness loans to help them cope with the economic fallout of the coronavirus epidemic. It also included a requirement that the SBA to issue simplified forms within 24 days after the legislation was adopted to make the process of applying for forgiveness. It also included conditions that aim to increase the number of bank loans by community banks, particularly for minority-owned companies that had trouble getting loans in the past.
“The Small Business Administration met the requirement of releasing the single-page form for loan forgiveness under the PPP within 24 days of the date of enactment 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 published new forms that were updated.”
First Draw PPP Terms of loan forgiveness
Mental Health Student Loan Forgiveness – For eligible borrowers, First Draw PPP loans can be qualified for loan forgiveness. This happens when the loan payment is made within an 8– to 24-week period.
- Employee and compensation levels are ensured
- The loan proceeds are spent on payroll and other expenses that are eligible and
- A minimum of 60% of proceeds are used for the cost of payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans granted to borrowers who meet the criteria are eligible for full loan forgiveness if during the 8to 24 week covered period following loan disbursement:
- The First Draw PPP loan requires that the compensation and employee levels are maintained in the identical manner.
- The loan funds are used on payroll as well as other eligible expenses and
- At least 60% of profits are used to pay for payroll expenses
- How to apply for loan forgiveness , and when to apply
Once all of the loan funds have been utilized, a borrower can apply for forgiveness. The borrower can apply for forgiveness at any point up to the date at which the loan matures. If borrowers do not apply for forgiveness within 10 months of the end of the covered period the PPP loan payments are no longer deferred and the borrower will be required to make monthly payments to their PPP lender.
Download Mental Health Student Loan Forgiveness
Gallery of Mental Health Student Loan Forgiveness
