The U.S. Small Business Administration has released a form of one page which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that are in line with the latest stimulus legislation.
The COVID-19 aid package Congress passed last month revived the PPP with $284 billion of 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 simplified forms within 24 days of the bill being approved by the lawmaker to streamline the process of applying for forgiveness, along with conditions that aim to increase the number of loans from community banks, particularly for minority-owned businesses who had trouble getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and said that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within 24 days from 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 issued more updated forms.”
First Draw PPP Terms of loan forgiveness
Ontario Student Loan Forgiveness Application – For borrowers who are eligible, First Draw PPP loans can be eligible for loan forgiveness. This applies when the loan is disbursed within an 8 to 24 week period.
- It’s the same for compensation and employees.
- The loan funds are used on payroll as well as other expenses eligible for reimbursement; and
- At least 60% of profits are spent on payroll costs
Second Draw PPP Loan Forgiveness Conditions
Second Draw PPP loans granted to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8to 24-week time period after 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.
- A minimum of 60% of the profits go towards the cost of payroll
- How and when to apply for loan forgiveness?
When all of the loan proceeds have been used the borrower is eligible to be forgiven. Borrowers can apply for forgiveness at any time prior to the maturity date of the loan. If they do not file for forgiveness within 10 months after the last day of the period covered the PPP loans are no longer deferred, and borrowers must make monthly payments to their PPP lender.