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 to forgive Paycheck Protection Program loans, together with updated and revised forms that comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month that included $284 billion of financing for small-scale businesses who needed loans. The money was intended to mitigate the economic effects of the coronavirus outbreak. The package also mandated the SBA to issue simplified forms within the first 24 hours after the legislation was adopted to make the process of applying for forgiveness. It also included conditions designed to facilitate more loans from community banks, particularly for minority-owned companies that struggled to get loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and stated that the Small Business Administration fulfilled the obligation to issue the one-page PPP form loan forgiveness within the first 24 hours of the date of enactment in the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published updated forms.”
First Draw PPP Loan forgiveness terms
Non Profit Jobs And Student Loan Forgiveness – For borrowers who are eligible, First Draw PPP loans can be eligible to be forgiven. This happens if the loan disbursement occurs within an 8– to 24 week period.
- The same goes for the pay and benefits for employees.
- The loan proceeds are spent on payroll expenses and other expenses that are eligible and
- A minimum of 60% of the proceeds are used for the cost of payroll
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans granted to eligible borrowers qualify for complete loan forgiveness, if within the 8to 24 week duration following loan disbursement:
- Pay and worker levels are kept in the same way as required for the First Draw PPP loan
- The loan funds can be used to cover payroll costs or other expenses that are eligible.
- At least 60% of the profits are used to pay for payroll expenses
- How and when to apply for loan forgiveness?
After all loan funds have been utilized the borrower is eligible to be granted forgiveness. Borrowers can apply for forgiveness any time 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 eligible to receive payment from their PPP lender.