The U.S. Small Business Administration has issued a one-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. It also includes newly revised forms to comply with the latest stimulus legislation.
Congress approved the COVID-19 relief plan last month, which offered $284 billion in funding for small-scale businesses who needed loans. This money was used to mitigate the economic effects of the coronavirus pandemic. It also included a requirement that the SBA to issue streamlined forms within the first 24 hours after the legislation was adopted to make the procedure of applying for forgiveness, along with conditions designed to facilitate more loans from community banks, particularly for minority-owned companies that were unable to obtain loans in the past.
“The Small Business Administration met the requirements to release the one page form for loan forgiveness under the PPP by 24 days after the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published new forms that were updated.”
First Draw PPP Loan forgiveness terms
Nursing Loan Forgiveness Programs – For eligible borrowers First Draw PPP loans are qualified to be forgiven. This is when the loan is disbursed within an 8– to 24-week period.
- Employee and compensation levels are ensured
- The proceeds of the loan can be used to cover the cost of payroll as well as other eligible expenses.
- A minimum of 60% of the profits are spent on payroll costs
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans to qualified customers are eligible for loan repayment when the loan is repaid within an 8– to 24 week period.
- The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exact same way.
- The loan proceeds are used on payroll costs as well as other eligible expenses and
- At least 60% of profits are spent on payroll costs
- How do I apply for loan forgiveness , and the time to apply
A borrower may apply for forgiveness after all loan proceeds to which the borrower wants forgiveness have been used. The borrower can apply for forgiveness at any time until the loan’s maturity date. If the borrower does not apply for forgiveness within 10 years of the end of the period covered and the loan is not renewed, PPP loans are no longer deferred and the borrower will be required to make monthly payments to their PPP lender.