The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the application process for forgiveness of Paycheck Protection Program loans, as well as newly updated and revised forms to conform to the requirements of the latest stimulus legislation.
Congress approved the COVID-19 relief package last month that offered $284 billion in funding to small businesses in need of loans. The money was intended to reduce the economic burden of the coronavirus epidemic. The legislation required that the SBA release simplified forms within 24 hours of the signing into law. This was done to simplify the process of applying for forgiveness. It also included conditions to encourage community banks to lend more particularly to minority-owned businesses who were unable to obtain loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said that the Small Business Administration fulfilled the requirement to issue the one-page PPP form loan forgiveness within 24 days from the date of the enactment of the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued updated forms.”
First Draw PPP Terms of loan forgiveness
Navient Student Loan Forms Federal Loan Forgiveness – First Draw PPP loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24 week period that follows loan disbursement:
- This is also true for compensation and employees.
- The proceeds from the loan may be used to pay expenses for payroll or other expenses that are eligible.
- A minimum of 60% of profits are used for the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans to eligible borrowers can be qualified for loan forgiveness if the loan is paid within an 8– 24 week time frame.
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exactly the same manner.
- The proceeds of the loan can be used to pay for payroll costs or other expenses that are eligible.
- At least 60% of proceeds go to the cost of payroll
- How do I apply for loan forgiveness and when to apply
A borrower can apply for forgiveness once the loan’s proceeds for which the borrower has applied for forgiveness have been utilized. Borrowers can apply for forgiveness anytime up to the maturity date of the loan. If the borrower does not apply for forgiveness within 10 years of the end of the time period that was covered and the loan is not renewed, PPP loan payments can no longer deferred, and borrowers must make payment to their PPP lender.