The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the application process to forgive Paycheck Protection Program loans, along with newly revised and updated forms to meet the requirements of the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month, which provided $284 billion of funding to small businesses in need of loans. This money was used to reduce the economic burden of the coronavirus epidemic. The law requires that the SBA issue simplified forms within the first 24 hours after the bill’s passage into law. This was to facilitate the application for forgiveness. The legislation also contained conditions that encourage community banks to lend more, especially to minority-owned businesses that had difficulty getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and stated that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within the first 24 hours from the date of enactment under 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 the updated forms.”
First Draw PPP Conditions for loan forgiveness
Mtsu Student Loan Forgiveness – First Draw PPP loans given to borrowers who are eligible can be granted full loan forgiveness if within the 8 to 24-week covered period following loan disbursement:
- Pay and worker levels are maintained
- The proceeds of the loan can be used to cover the cost of payroll as well as other eligible expenses.
- A minimum of 60% of proceeds are used to pay for payroll expenses
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans for eligible borrowers can be eligible for loan repayment when the loan is paid within an 8– to 24 week time frame.
- Employee and compensation levels are maintained in the same way in accordance with the First Draw PPP loan
- The loan proceeds are used on payroll as well as other eligible expenses and
- A minimum of 60% of proceeds are used for the cost of payroll
- How do I request loan forgiveness and when
A borrower may apply for forgiveness after all loan proceeds to which the borrower is requesting forgiveness have been utilized. Borrowers can apply for forgiveness at any time prior to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 month of the expiration date of the loan are able to receive payment from their PPP lender.