The U.S. Small Business Administration released a one-page form that aims to simplify the application process to forgive Paycheck Protection Program loans, along with newly updated and revised forms that comply with the most recent stimulus legislation.
The COVID-19 relief package that Congress approved last month renewed the PPP with $284 billion of funds for small businesses that want forgiven loans to help to deal with the effects of economic collapse from the coronavirus pandemic. The law requires that the SBA release simplified forms within 24 hours of the legislation’s signing into law. This is to make it easier to apply for forgiveness. It also included conditions to encourage community banks to make more loans particularly to minority-owned businesses who were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the obligation to issue the PPP form, which is one page long, for loan forgiveness within the first 24 hours of the date of enactment under the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released updated forms.”
First Draw PPP Loan forgiveness terms
New Student Loan Forgiveness 2022 – For those who qualify First Draw PPP loans are eligible to be forgiven. This is when the loan is disbursed within an 8 to 24-week timeframe.
- It’s the same for pay and benefits for employees.
- The loan proceeds are used on payroll expenses as well as other expenses eligible for reimbursement; and
- At least 60% of funds go to the cost of payroll
Second Draw PPP Loan Forgiveness Terms
Second Draw PPP loans made to borrowers who are eligible can be granted complete loan forgiveness, if within the 8to 24-week time period after the loan’s disbursement
- The First Draw PPP loan requires that the employee and compensation levels be maintained in the exactly the same manner.
- The loan proceeds could be used to pay payroll costs or other expenses that are eligible.
- A minimum of 60% of the proceeds go to expenses for payroll
- How to apply for loan forgiveness , and when
The borrower is eligible for forgiveness after all loan proceeds to which the borrower wants forgiveness have been used. Borrowers can apply for forgiveness anytime up to the maturity date of the loan. Borrowers who do not request forgiveness within 10 month of the expiration date of the loan are able to receive loan payments from their PPP lender.