Personal Loan Forgiveness Form

The U.S. Small Business Administration has issued a one-page form that makes it easier to apply for forgiveness of Paycheck Protection Program loans. The form is also updated with new forms to comply with the latest stimulus legislation. 

Congress approved the COVID-19 relief plan last month and included $284 billion of financing to small businesses that needed loans. The money was intended to reduce the economic burden of the coronavirus pandemic. The law requires that the SBA provide simplified forms within 24 hours after the bill’s passage into law. This is to facilitate the application for forgiveness. The legislation also contained conditions to encourage banks in the community to lend more specifically to minority-owned companies who had a difficult time getting loans in the past.

Personal Loan Forgiveness Form

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, said 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 the enactment of the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published additional updated forms.”

Terms for forgiveness for the initial draw of PPP loans

Personal Loan Forgiveness Form – For borrowers who are eligible First Draw PPP loans can be eligible to be forgiven. This is when the loan payment is made within an 8 to 24 week period.

  • Pay and worker levels are maintained
  • The proceeds of the loan can be used to pay expenses for payroll or other expenses that are eligible.
  • A minimum of 60% of the funds go to payroll costs

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans granted to eligible borrowers qualify for full loan forgiveness if during the 8to 24-week duration following loan disbursement:

  • Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan
  • The proceeds of the loan can be used to pay payroll costs or other expenses that are eligible.
  • A minimum of 60% of the funds go to expenses for payroll
  • How to apply for loan forgiveness , and when to apply

The borrower is eligible for forgiveness after all loan proceeds for which the borrower is requesting forgiveness have been utilized. Borrowers can apply for forgiveness anytime up to the maturity date of the loan. If they do not file for forgiveness within 10 years of the date of expiration of the period covered the PPP loan payments can no longer deferred, and borrowers will begin making monthly payments to their PPP lender.

Download Personal Loan Forgiveness Form

Gallery of Personal Loan Forgiveness Form

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