The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the application process for the forgiveness of Paycheck Protection Program loans, together with updated and revised forms that comply with the latest stimulus legislation.
Congress approved the COVID-19 relief package in the month of March that offered $284 billion in funding to small businesses in need of loans. The money was intended to mitigate the economic effects of the coronavirus outbreak. It included a requirement for the SBA to issue streamlined forms within 24 days of the legislation being approved by the lawmaker to streamline the process of applying for forgiveness. It also included conditions designed to facilitate more loans from community banks, particularly for minority-owned companies that were unable to obtain loans in the past.
“The Small Business Administration met the requirements to release the single-page form for the forgiveness of PPP loans within 24 hours of the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also issued new forms.”
First Draw PPP Conditions for loan forgiveness
Navient Student Loan Forgiveness Calls – For eligible borrowers First Draw PPP loans can be qualified to forgive loans. This happens when the loan is disbursed within an 8– to 24 week period.
- The same goes for the employee compensation and the.
- The loan proceeds are used on payroll costs and other expenses that are eligible and
- A minimum of 60% of proceeds are used to pay for payroll expenses
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans for eligible customers are qualified for loan forgiveness if the loan is paid within an 8to 24-week period.
- Employee and compensation levels are kept in the same way in accordance with the First Draw PPP loan
- The loan funds can be used to pay expenses for payroll or other expenses that are eligible.
- At least 60% of funds go to payroll costs
- How do I request loan forgiveness and when to apply
The borrower is eligible for forgiveness once all loan proceeds for which the borrower wants forgiveness have been utilized. Borrowers may apply for forgiveness at any time up to the date of maturity. Borrowers who don’t request forgiveness within 10 month of the expiration date of the loan will be able to receive payment from their PPP lender.