Mentor Loan Forgiveness

Mentor Loan Forgiveness

The U.S. Small Business Administration has released a 1-page form that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that comply with the most recent stimulus law. 

The COVID-19 relief plan that Congress passed last month revived the PPP with $284 billion of funding for small businesses seeking forgivable loans to help them to deal with the effects of economic collapse of the coronavirus epidemic. The law required that the SBA provide simplified forms within 24 hours of the signing into law. This is to make it easier to apply for forgiveness. It also included conditions that would encourage community banks to lend more particularly to minority-owned businesses who had a difficult time getting loans in the past.

Mentor Loan Forgiveness

“The Small Business Administration met the requirement to issue the one-page form for loan forgiveness under the PPP within 24 days of the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released new forms.”

Forgiveness terms in the first draw of PPP loans

Mentor Loan Forgiveness – First Draw PPP loans granted to borrowers who are eligible can be granted complete loan forgiveness if they do so within the 8 to 24-week period after the disbursement of loan:

  • It’s the same for compensation and employees.
  • The proceeds from the loan may be used to pay for the cost of payroll as well as other eligible expenses.
  • At least 60% of proceeds are spent on payroll costs

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans for eligible borrowers can be qualified for loan forgiveness if the loan is paid within an 8– to 24-week period.

  • The First Draw PPP loan requires that the employee and compensation levels be maintained in an exact same way.
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • Minimum 60% of proceeds go to expenses for payroll
  • How do I apply for loan forgiveness and when to apply

A borrower can apply for forgiveness once all loan proceeds for which the borrower has applied for forgiveness have been utilized. The borrower can apply for forgiveness at any time up to the loan’s maturity date. Borrowers who do not request forgiveness within 10 month of the end date of the loan are able to receive payment from their PPP lender.

Download Mentor Loan Forgiveness

Gallery of Mentor Loan Forgiveness


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