The U.S. Small Business Administration has released a form of one page that simplifies the application for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the most recent stimulus law.
Congress approved the COVID-19 relief package last month that provided $284 billion of funding for small-scale businesses who needed loans. The money was intended to reduce the economic burden of the coronavirus epidemic. It included a requirement for the SBA to issue simplified forms within 24 hours of the bill being adopted to make the procedure of applying for forgiveness. It also included conditions meant to encourage more loans from community banks, especially for minority-owned businesses who had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within 24 hours from the date of enactment in 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.”
Terms for forgiveness for the first draw of PPP loans
Nc Student Loan Forgiveness For Teachers – First Draw PPP loans given to borrowers who are eligible can be granted total loan forgiveness within the 8 to 24-week period after the disbursement of loan:
- Pay and worker levels are maintained
- The loan proceeds are used on payroll and other eligible expenses; and
- A minimum of 60% of proceeds are used to pay for payroll expenses
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to eligible customers are eligible for loan forgiveness when the loan is repaid within an 8– 24 week time frame.
- The First Draw PPP loan requires that the compensation and employee levels are maintained in the identical manner.
- The loan funds are used on payroll costs and other eligible expenses; and
- A minimum of 60% of profits are spent on payroll costs
- How do I request loan forgiveness and the time to apply
A borrower can apply for forgiveness after all loan proceeds for which the borrower has applied for forgiveness have been utilized. The borrower can apply for forgiveness at any point up to the loan’s maturity date. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan are eligible to receive the loan payment from their PPP lender.