The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the process of applying for forgiveness of Paycheck Protection Program loans, together with updated and revised forms that conform to the requirements of the most recent stimulus legislation.
The COVID-19 relief package that Congress approved last month renewed the PPP with $284 billion of financing for small-scale businesses looking for forgiven loans to help to deal with the effects of economic collapse of the coronavirus epidemic. The law required that the SBA issue simplified forms within the first 24 hours of the 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 particularly to minority-owned businesses that had difficulty getting loans last year.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs wrote that the Small Business Administration fulfilled the requirement 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. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published the updated forms.”
First Draw PPP Conditions for loan forgiveness
Parent Plus Loan Forgiveness Retirement – First Draw PPP loans given to eligible borrowers qualify for total loan forgiveness within the 8-to 24-week covered period following the disbursement of loan:
- It’s the same for employee compensation and the.
- The loan proceeds are used on payroll expenses and other expenses that are eligible and
- Minimum 60% of proceeds go to the cost of payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to qualified borrowers are eligible for loan forgiveness when the loan is repaid within an 8– 24-week period.
- Pay and worker levels are maintained in the same manner as is required for the First Draw PPP loan
- The proceeds of the loan could be used to pay payroll costs or other eligible expenses.
- A minimum of 60% of the profits go towards the cost of payroll
- How to request loan forgiveness and when to apply
When all of the loan’s proceeds have been used the borrower is eligible to be granted forgiveness. Borrowers may apply for forgiveness at any point up to the loan’s maturity date. If they do not file for forgiveness within 10 months of the date of expiration of the covered period, then PPP loans are not deferred any longer, and borrowers must make payment to their PPP lender.