The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the process of applying for the forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms to meet the requirements of the most recent stimulus legislation.
The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiveness loans to help them cope with the economic fallout of the coronavirus epidemic. The legislation required that the SBA release simplified forms within the first 24 hours after the bill’s passage into law. This is to facilitate the application for forgiveness. It also included conditions that encourage banks in the community to lend more particularly to minority-owned businesses who had a difficult time getting loans in the past.
“The Small Business Administration met the requirements to release the one-page form for the forgiveness of PPP loans by 24 days after the date of the 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 additional updated forms.”
First Draw PPP Conditions for loan forgiveness
Navient Loan Forgiveness Phone Number – For borrowers who are eligible First Draw PPP loans can be suitable to forgive loans. This is when the loan is disbursed within an 8 to 24-week period.
- Employee and compensation levels are ensured
- The loan proceeds are used on payroll costs and other expenses that are eligible and
- At least 60% of the proceeds are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans given to eligible borrowers qualify for total loan forgiveness if they do so during the 8to 24 week duration following the loan’s disbursement
- The First Draw PPP loan requires that the compensation and employee levels are maintained in the exact same way.
- The loan proceeds are spent on payroll costs and other expenses that are eligible and
- At least 60% of the proceeds are used for the cost of payroll
- How and when to apply for loan forgiveness?
The borrower is eligible for forgiveness once all loan proceeds to which the borrower wants forgiveness have been used. The borrower can apply for forgiveness at any point up to the loan’s maturity date. If the borrower does not apply for forgiveness within 10 months of the date of expiration of the time period that was covered the PPP loan payments can no longer deferred, and borrowers will begin making monthly payments to their PPP lender.