The U.S. Small Business Administration issued a one-page application form aimed at simplifying the application process to forgive Paycheck Protection Program loans, along with newly revised and updated forms to meet the requirements of the latest stimulus legislation.
The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion in funding for small businesses seeking forgiven loans to help deal with the financial fallout from the coronavirus outbreak. It included a requirement for the SBA to issue streamlined forms within 24 days of the legislation being approved by the lawmaker to streamline the process of applying for forgiveness. The legislation also contained conditions designed to facilitate more bank loans by community banks, especially for minority-owned businesses that had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and stated that the Small Business Administration fulfilled the requirement to publish the one-page form for PPP loan forgiveness within 24 hours from the date of the enactment of 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 Terms of loan forgiveness
Obama Forgives Student Loans Hoax – First Draw PPP loans made to borrowers who meet the criteria are eligible for full loan forgiveness if within the 8 to 24-week period after loan disbursement:
- The levels of compensation and employee pay are ensured
- The loan proceeds are spent on payroll expenses and other eligible expenses; and
- A minimum of 60% of the profits go towards the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to eligible borrowers can be eligible for loan repayment when the loan is paid within an 8– to 24-week time frame.
- The First Draw PPP loan requires that the employee and compensation levels be maintained in the exactly the same manner.
- The loan proceeds are used on payroll expenses as well as other eligible expenses and
- A minimum of 60% of the proceeds go to payroll costs
- How do I apply for loan forgiveness , and when
When all of the loan funds have been utilized The borrower may apply to be granted forgiveness. Borrowers may apply for forgiveness at any time until the loan’s maturity date. Borrowers who don’t request forgiveness within 10 months of the end date of the loan are eligible to receive payment from their PPP lender.