The U.S. Small Business Administration issued a one-page application form that aims to simplify the process of applying for forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to comply with the most recent stimulus legislation.
The COVID-19 aid package Congress passed last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiven loans to help deal with the financial fallout from the coronavirus outbreak. The law required that the SBA provide simplified forms within the first 24 hours of the legislation’s signing into law. This was done to simplify the process of applying for forgiveness. Additionally, it included conditions that encourage banks in the community to lend more specifically to minority-owned companies that had difficulty getting loans last year.
“The Small Business Administration met the requirements to release the single-page form for PPP loan forgiveness within 24 hours of the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published additional updated forms.”
First Draw PPP Terms of loan forgiveness
Nys Teacher Loan Forgiveness Form – For those who qualify, First Draw PPP loans are suitable to be forgiven. This applies 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 can be used to pay for the cost of payroll as well as other expenses that are eligible.
- A minimum of 60% of profits are spent on payroll costs
Second Draw PPP Terms of Loan Forgiveness
Second Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness if they do so during the 8to 24-week covered period following loan disbursement:
- Employee and compensation levels are maintained in the same manner as is required for the First Draw PPP loan
- The loan proceeds can be used to pay the cost of payroll as well as other expenses that are eligible.
- Minimum 60% of funds go to the cost of payroll
- What is the best time to apply for loan forgiveness?
When all of the loan’s proceeds have been used, a borrower can apply to be granted forgiveness. The borrower can request forgiveness at any time prior to the maturity date of the loan. If the borrower does not apply for forgiveness within 10 years of the last day of the time period that was covered and the loan is not renewed, PPP loan payments are no longer deferred, and borrowers will begin making monthly payments to their PPP lender.