The U.S. Small Business Administration released a one-page form that aims to simplify the process of applying for the forgiveness of Paycheck Protection Program loans, as well as newly updated and revised forms to comply with the latest stimulus legislation.
Congress approved the COVID-19 relief package last month that provided $284 billion of funding for small-scale businesses who needed loans. The funds were used to reduce the economic burden of the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within 24 hours of the bill being signed into law to simplify the application process for forgiveness. It also included conditions that aim to increase the number of loans from community banks, especially for minority-owned companies that had trouble getting loans in the past.
“The Small Business Administration met the requirement of releasing the single-page form for PPP loan forgiveness by 24 days after the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published updated forms.”
Forgiveness terms for the first draw of PPP loans
Payday Loan Forgiveness – For those who qualify First Draw PPP loans can be eligible for loan forgiveness. This is if the loan disbursement occurs within an 8 to 24 week period.
- Pay and worker levels are kept at a constant level.
- The loan proceeds are used on payroll costs and other expenses that are eligible and
- Minimum 60% of profits go towards payroll costs
Second Draw PPP Conditions for loan forgiveness
Second Draw PPP loans to eligible customers are qualified for loan forgiveness if the loan is paid within an 8– to 24-week period.
- Employee and compensation levels are maintained in the same way as required for the First Draw PPP loan
- The loan funds could be used to pay for the cost of payroll as well as other eligible expenses.
- A minimum of 60% of the profits are used for the cost of payroll
- How do I apply for loan forgiveness , and when to apply
A borrower may apply for forgiveness after the loan’s proceeds for which the borrower is requesting forgiveness have been utilized. The borrower can request forgiveness at any time prior to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 month of the end date of the loan will be able to receive loan payments from their PPP lender.
Download Payday Loan Forgiveness
Gallery of Payday Loan Forgiveness
