The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for forgiveness of Paycheck Protection Program loans. It also includes newly revised forms that are in line with the latest stimulus legislation.
Congress approved the COVID-19 relief package last month, which included $284 billion of financing for small-scale businesses who needed loans. The funds were used to offset the economic impact of the coronavirus pandemic. It also included a requirement that the SBA to issue simplified forms within 24 days of the bill being signed into law to simplify the application process for forgiveness. It also included conditions meant to encourage more bank loans by community banks, especially for minority-owned businesses who were unable to obtain loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated 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 under the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published new forms.”
First Draw PPP Terms of loan forgiveness
Nurse Student Loan Forgiveness Illinois – For eligible borrowers First Draw PPP loans can be eligible to be forgiven. This happens when the loan payment is made within an 8 to 24-week period.
- It’s the same for employee compensation and the.
- The loan proceeds are used on payroll costs and other eligible expenses; and
- A minimum of 60% of the funds go to expenses for payroll
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans granted to eligible borrowers qualify for full loan forgiveness if during the 8to 24 week covered period following loan payment:
- Employee and compensation levels are kept in the same way as required for the First Draw PPP loan
- The loan proceeds are used on payroll expenses and other expenses that are eligible and
- A minimum of 60% of the proceeds are spent on payroll costs
- How to apply for loan forgiveness and when to apply
A borrower may apply for forgiveness only after the loan’s proceeds for which the borrower has applied for forgiveness have been used. Borrowers may apply for forgiveness at any time until the date of maturity. If they do not file for forgiveness within 10 months after the end of the time period that was covered the PPP loan payments are not deferred any longer, and borrowers must make loan payments to their PPP lender.