The U.S. Small Business Administration has released a form of one page that simplifies the application for the cancellation of Paycheck Protection Program loans. The form is also updated with new forms that comply with the most recent stimulus legislation.
Congress approved the COVID-19 relief plan last month that included $284 billion of financing for small-scale businesses who needed loans. The money was intended to mitigate the economic effects of the coronavirus outbreak. The package also mandated the SBA to issue simplified forms within 24 hours after the legislation was signed into law to simplify the application process for forgiveness. The legislation also contained conditions that aim to increase the number of loans from community banks, especially for minority-owned businesses who struggled to get loans last year.
“The Small Business Administration met the requirements to release the single-page form for the forgiveness of PPP loans by 24 days after the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published more updated forms.”
First Draw PPP Conditions for loan forgiveness
Parent Plus Loan Forgiveness – For eligible borrowers First Draw PPP loans are suitable to be forgiven. This happens when the loan payment is made within an 8– to 24 week period.
- It’s the same for pay and benefits for employees.
- The proceeds of the loan can be used to pay payroll costs or other eligible expenses.
- A minimum of 60% of the proceeds go to expenses for payroll
Second Draw PPP Loan forgiveness terms
Second Draw PPP loans to eligible customers are eligible for loan forgiveness if the loan is paid within an 8to 24 week time frame.
- Employee and compensation levels are maintained in the same way as required for the First Draw PPP loan
- The loan proceeds are spent on payroll and other eligible expenses; and
- A minimum of 60% of the proceeds are spent on payroll costs
- How to apply for loan forgiveness , and when
After all loan’s proceeds have been used The borrower may apply to be granted forgiveness. Borrowers can request forgiveness at any time until the date at which the loan matures. Borrowers who do not request forgiveness within 10 months of the expiration date of the loan are able to receive the loan payment from their PPP lender.
Download Parent Plus Loan Forgiveness
Gallery of Parent Plus Loan Forgiveness
