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. It also includes newly revised forms to comply with the latest stimulus legislation.
Congress approved the COVID-19 relief package last month and offered $284 billion in funding to small businesses that needed loans. This money was used to mitigate the economic effects of the coronavirus outbreak. The law requires that the SBA issue simplified forms within 24 hours of the signing into law. This was to make it easier to apply for forgiveness. Additionally, it included conditions that encourage banks in the community to lend more, especially to minority-owned businesses who were unable to obtain loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within 24 days from the date of the enactment of the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published new forms that were updated.”
First Draw PPP Loan forgiveness terms
Navient Lawsuit Loan Forgiveness – For eligible borrowers, First Draw PPP loans can be qualified for loan forgiveness. This happens when the loan is disbursed within an 8– to 24-week timeframe.
- This is also true for pay and benefits for employees.
- The proceeds from the loan may be used to pay for expenses for payroll or other expenses that are eligible.
- At least 60% of profits are used for the cost of payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans given to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8to 24-week covered period following loan payment:
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in the identical manner.
- The loan proceeds are used on payroll and other eligible expenses; and
- Minimum 60% of profits go towards expenses for payroll
- How do I apply for loan forgiveness and when to apply
The borrower is eligible for forgiveness after all loan proceeds for which the borrower is requesting forgiveness have been utilized. Borrowers can request forgiveness at any time up to the date of maturity. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan are eligible to receive loan payments from their PPP lender.