The U.S. Small Business Administration has released a single-page form aimed at simplifying the process of applying to forgive Paycheck Protection Program loans, along with newly updated and revised forms that comply with the most recent stimulus legislation. 

Congress approved the COVID-19 relief package last month, which provided $284 billion of funding to small businesses that needed loans. The money was intended to reduce the economic burden of the coronavirus outbreak. The package also mandated the SBA to issue streamlined forms within the first 24 hours of the legislation being adopted to make the process of applying for forgiveness. It also included conditions that aim to increase the number of bank loans by community banks, particularly for minority-owned businesses who had trouble getting loans last year.

“The Small Business Administration met the requirement of releasing the one page form for loan forgiveness under the PPP within 24 days of 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 released updated forms.”

First Draw PPP Conditions for loan forgiveness

Perkins Loan Forgiveness For Teachers Form – For those who qualify First Draw PPP loans are suitable to be forgiven. This is if the loan disbursement occurs within an 8– to 24-week period.

• Pay and worker levels are maintained
• The loan proceeds are spent on payroll costs and other expenses that are eligible and
• A minimum of 60% of the proceeds go to expenses for payroll

Second Draw PPP Terms of Loan Forgiveness

Second Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if during the 8– to 24-week time period after loan payment:

• The levels of compensation and employee pay are kept in the same way as is required for the First Draw PPP loan
• The proceeds of the loan could be used to pay payroll costs or other expenses that are eligible.
• A minimum of 60% of the profits go towards payroll costs
• How do I apply for loan forgiveness and the time to apply

Once all of the loan’s proceeds have been used The borrower may apply to be granted forgiveness. Borrowers can request forgiveness at any time up to the loan’s maturity date. If the borrower does not apply for forgiveness within 10 years of the end of the covered period the PPP loan payments are no longer deferred and borrowers will begin making payment to their PPP lender.

Download Perkins Loan Forgiveness For Teachers Form

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